On Reality Asserts Itself, Ms. Foroohar says financialization delivers stagnant wages, inequality and economic crisis; the Financial Times columnist and author of “Makers and Takers” says the financial sector represents only 7 percent of the U.S. economy, but takes around 25 percent of all corporate profit while creating only 4 percent of all jobs - with host Paul Jay
Apple, Market Manipulation and the Cult of Personal Finance - RAI with Rana Foroohar 2/ 6
On Reality Asserts Itself, Ms. Foroohar says the legalization of stock buybacks in 1982 allowed companies like Apple to now spend only 15% of their investments on R&D, while the majority is spent on market manipulation; the Financial Times columnist and author of “Makers and Takers” says the move from traditional pensions to 401k’s makes everyone feel they benefit from finance, when the vast majority of profits go to the elites and most people’s living standards deteriorate – with host Paul Jay
11 comments:
Of course, this horrible outcome is all caused by fiat money, which is why it was created by the .1% in the first place. The first thing they did with it was fund US entry into WWI without having to tax the rabble. Those first getting the new fiat money are stealing purchasing power from those holding the old money. That is the fundamental and objective characteristic of the system. It's such an outlandishly immoral system, I could never imagine anyone who understands it thinking it is wonderful. Then I came across the MMTers.
If your watch the videos you will see that it was the deregulation that caused all the problems, Bob.
In the mid-1970s, financial capitalism started to eclipse industrial capitalism. This process accelerated under Reagan and Thatcher. In the previous era, finance facilitated industrial capitalism, and greased the wheels of the economy. Finance capital and industrial capital grew more or less apace. Regulatory standards limited the types and quantities of investments that could be undertaken by commercial banks and other financial intermediaries.
All this changed when financiers bribed politicians to deregulate (i.e. decriminalize) financial fraud and theft. Under Reagan, stock buybacks were legalized. In 1999, President Clinton repealed the Glass Steagall Act, and also signed the Commodity Futures Modernization Act of 2000, which decriminalized fraud in the financial derivatives sector.
Today the primary field of investment is not the production of real value, but the buying and selling of ownership titles, often via fraud. The main source of profit making is now rent extraction, debt bondage, and asset price inflation via stock buybacks and so on.
This causes a net outflow of funds from the real sector into the financial sector. Where finance capital and industrial capital were once symbiotic, their relationship is now parasitic, as finance capital sucks the life out of the nation, leaving a dead husk. Hence the USA is doomed.
Real investment has dwindled as larger and larger portions of corporate earnings are funneled out of the real sector into the financial sector through stock buybacks, mergers, and predatory takeovers.
Whenever the banks and other financial institutions face a crisis from sucking too much out of the host economy, the federal government bails out the parasites so they can keep sucking from the host.
Meanwhile the masses have been programmed to worship all this, and to condemn anything other than today’s nightmare as evil socialism.
Unfortunately Ms. Foroohar does not understand MMT. Nor does Paul Jay. They think the U.S. government has a “debt crisis” caused by tax cuts and by bailing out the financial giants. Also they fail to distinguish between private debt and public federal debt.
In the fourth video at 7:48 Ms. Foroohar says, “There’s almost $60 trillion more in outstanding debt out there in the world right now than there was before the 2008 crash. The difference is that most of it is held by governments, because they had to take the hit following the financial crisis with these bailouts, and with the recession, which hit tax revenues.”
Ms. Foroohar continues, “We need to retool the economy by revamping education, and improving infrastructure, but governments don’t have the money or the clout to make those investments.”
At the federal level this is false, since the US government can create infinite money out of thin air. However I don’t expect Ms. Foroohar to understand that. After all, she’s only a financial analyst.
I picked up I that, Konrad, she's obviously a very bright person, but she came across as not so bright at that point. I thought with all the economics she understands (I assume she has an economics degree) and she can't figure that out? Also, she believes the Russiagate nonsense.
Those first getting the new fiat money are stealing purchasing power from those holding the old money. Bob Roddis
That would happen with new expensive fiat too, such as new gold coins.
That is the fundamental and objective characteristic of the system. Bob Roddis
Not really since equal and simultaneous fiat distributions to all citizens should not cause Cantillon effects, at least not among citizens.
Of course, this horrible outcome is all caused by fiat money, ... Bob Roddis
Our current, heavily privileged two-tiered money system, whereby fiat use is largely limited to the banks, etc., was designed or evolved for expensive fiat, i.e. the Gold Standard.
It's actually inexpensive fiat that permits ALL government privileges for the banks to be abolished since all citizens may now use fiat itself and not require bank deposits.
since all citizens may now use fiat itself aa
That is, the price of fiat is not a hindrance to its general use by the population; there still remains the issue that the non-bank private sector (and State and local governments) may not use fiat as the banks do - in convenient, inherently risk-free account form at the Central Bank itself.
Would someone please explain why having the government produce "cheap fiat" out of nothing and then give it to the rabble is a good idea. And why it is necessary. And what problem it is allegedly trying to fix. And what horrible thing might happen if it stopped doing so.
"Would someone please explain why having the government produce "cheap fiat" out of nothing and then give it to the rabble is a good idea. And why it is necessary. And what problem it is allegedly trying to fix. And what horrible thing might happen if it stopped doing so." ~ Bob Roddis
Modern societies use money as a medium of exchange and a quantitative measure of value. As things are today, if the US government stopped issuing money, then all money (not just most money) would have to be borrowed from the bankers.
Many civilizations of the past have existed without money, but if you can think of a realistic alternative to money in today's society, I would sincerely like to hear your ideas.
Would someone please explain why having the government produce "cheap fiat" out of nothing Bob Roddis
Fiat is backed by the authority and power of government to tax - any other backing is superfluousness.
In the past, gold and silver served as:
1) anti-counterfeiting measures. This is long obsolete and unnecessarily expensive.
2) a crude means to limit the production rate of fiat by tying it to the mining rates of gold and silver. But:
a) Government privileges for the banks artificially suppress the DEMAND for fiat. Thus there is no free market in fiat.
b) Under-production of fiat is problematic too, e.g if it does not keep up with population growth.
and then give it to the rabble is a good idea. ibid
Would you prefer that government itself spend new fiat into existence? By, say, buying gold from you and other Austrians? In order to bury it in a Central Bank vault or waste it as gold coins? And that's libertarian?
And why it is necessary. ibid
So you prefer no fiat creation at all? So that real returns might be obtained by doing nothing with fiat but hoarding it risk-free?
Is that a recipe for justice and progress or oppression and stagnation?
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