Hmm, I'm pretty sure this is just how capitalism works. Sorry :(
Crony capitalism may be cannibalizing productive capitalism in the U.S.
211–220 of 263 posts
Re: Crony capitalism may be cannibalizing productive capitalism in the U.S.
#212Earlier quoted context omitted.
While wealth is more concentrated in the US, access to capital is probably at an all time high. Interest rates on loans are tiny and equity markets have never been deeper.
And why isn't productivity increasing if capital required to develop enhancements is available? And a related question if capital and access to it is at an all time high, then why do we have stagnant economic growth?
That is definitely one of the big mysteries of the modern era. Personally I subscribe to the hypothesis that we're just running out of low-hanging fruit. As humans developed better knowledge of biology, chemistry & physics there were a whole host of relatively easy to invent items from the steam engine, to antibiotics to air travel to the transistor and modern electronics.
These were world changing.
But now we're mostly done doing that and are now in the refinement stage on most technologies where we spend an enormous amount of effort to get, for example, 5% more fuel efficient airplanes. Physics is tough.
Maybe we'll have some sort of revolutionary breakthroughs in the future that lead to another era of rapid invention but until that happens we'll continue plodding along building a slightly more efficient world instead of a transformative one.
This is really just one hypothesis though. The real answer is that no one really knows for sure.
Re: Crony capitalism may be cannibalizing productive capitalism in the U.S.
#213I think the great problem of our time is that the challenges get easier to solve every day but we mostly spend our time making rent. And not the kind of rent mentioned in the article - just plain old fashioned too-much-month-not-enough-money kind of rent. When we’re desperate, we grovel and do whatever work we need to to survive. This is akin to how researchers spend inordinate amounts of time applying for grants rat…
I totally agree with the statement about wealthy individuals pouring money into very few narrow channels.
Wealthy people don't think outside the box enough, they just invest money with their friends who are probably already wealthy themselves. This widens the class gap and is bad for the economy.
Re: Crony capitalism may be cannibalizing productive capitalism in the U.S.
#214Earlier quoted context omitted.
Kind of reminds me of that episode of Always Sunny in Philadelphia where Danny DeVito's character comes out of retirement to save his former company. "So what do we make here, Frank?" "What d'you mean? We make money." "Right, yes, but what do we actually create?" "We create wealth." "Okay, but like, what do we produce, what do we manufacture, what do we design?" "Manufacture? Leave that to the c&$%^s, we produce prof…
I wonder if anyone has written software that takes Amazon Prime listings and copies them to eBay with a tiny markup then automates the payment transfer.
I do not know if it was automated, but two eBay sellers I purchased from were doing this with their Amazon Prime accounts - the items were shipped to my address by Amazon. I was upset because the reason I shop on eBay instead of Amazon is to purchase from independent resellers and vendors.
Re: Crony capitalism may be cannibalizing productive capitalism in the U.S.
#215Earlier quoted context omitted.
> You doubt people act in their rational self-interest? Yes the rational choice model is well-established to be false. They may act in their perceived self-interest, but rational self-interest involves a lot more than that.
> Yes the rational choice model is well-established to be false. Citation? I hear this a lot, and it seems to stem from a misunderstanding of the word "rational" in this context, which I believe is supposed to mean "perceived" - how else would you objectively define rational? Is it rational for a thirsting person to prefer gatorade to water (it is for them, if that's the choice they want to make)? Do you have more pe…
Rational choice theory holds that actual behavior will be that which maximizes utility (in it's simple form), and expected (in the Bayesian probability sense) utility (in the more complex version addressing uncertainty.)
“Rationality” refers specifically to this mathematical optimization.
Re: Crony capitalism may be cannibalizing productive capitalism in the U.S.
#216I think the great problem of our time is that the challenges get easier to solve every day but we mostly spend our time making rent. And not the kind of rent mentioned in the article - just plain old fashioned too-much-month-not-enough-money kind of rent. When we’re desperate, we grovel and do whatever work we need to to survive. This is akin to how researchers spend inordinate amounts of time applying for grants rat…
A lot of that tax money goes to pay interest payments on government bonds which are owned by the rent collector class. The more money the government borrows to pay for health care and such, the more money the rent collectors make. They've effectively hijacked the progressive impulse to create a way for their vast wealth to earn interest. The regular bond markets would never be able to soak up such enormous amounts of…
> China creates their own debt free money as needed. The U.S government must borrow it. You ever notice how economic pundits have been predicting an economic crash in China for the last 30 years that never seems to come? It's because the government just endlessly bails out the economy in a debt-free way that never sticks the taxpayers with the bill.
That's.... not how it works. USA consumers purchase lots of imports from China, which causes massive flows of capital from the USA to China. China uses these capital flows to purchase treasuries from the USA which (in part) funds the federal deficit.
At no point is China just "creating debt-free money".
The exact same thing happens in other countries with large trade surpluses. Part of the reason for the Greek crisis was that Germany exports a lot of goods to Greece. This capital flow drives down the price of money (the interest rate) in Frankfurt and drives up the price of money in Athens. The Germans, seeing that they could get 1% at home or 7% in Greece (in the early 00's) then used the capital flows to purchase securities in Greece, such as bonds, CDOs and CDSs.
Re: Crony capitalism may be cannibalizing productive capitalism in the U.S.
#217Earlier quoted context omitted.
>Does it seem to anyone else that the finance industry is increasingly distracted from actually matching up capital to fundamentally productive companies, especially new companies? This is somewhat controversial to posit, but I believe the corruption in the financial industry is extraordinarily entrenched because of the Fed. Before you call me a lunatic, smart and good people from Aaron Schwartz to Sanders have said…
Do you have a source where Sanders said the Fed should be eliminated, or was that Swartz? I believe the comment about socialism for the rich -- here is his NYT op-ed on the Fed: https://www.nytimes.com/2015/12/23/opinion/bernie-sanders-to...
Schwartz said verbatim the Fed should be eliminated. Sanders has said much negative on the Fed, specifically that it's 'socialism for the rich, and rugged individualism for everyone else,' and variations along the lines of 'fix the Fed,' but Schwartz is who said to completely end it.
Re: Crony capitalism may be cannibalizing productive capitalism in the U.S.
#218Earlier quoted context omitted.
You're saying we should get rid of the financial industry? What, because we're all so good at managing our own money? Guaranteeing the big banks can't fail is how we keep the economy going. If a bank fails, everyone that is owed money by that bank fails too. Is that acceptable? Would you be fine with your employer going belly up because the bank they rely on can't pay out money?
Guaranteeing the big banks can't fail is a source of moral hazard, removing the cost of being wrong from those taking the risk and transferring it to the general public. Make the banks responsible for the negative consequences of their actions with no potential for bailout, and watch their behavior change.
This is exactly right.
Just to address the above poster: vanilla banking could still be guaranteed. By contrast, in essence the Fed is guaranteeing the banks' risky investments.
Re: Crony capitalism may be cannibalizing productive capitalism in the U.S.
#219Earlier quoted context omitted.
" That's money being pulled out of the economy through taxes. " That money goes straight back into the economy.
That's not the point. The OP said "In the olden days, the main force balancing this was taxation.". My comment was taxation is higher now than it's ever been.
Counterpoint: it's not. I can substantiate my counterpoint after you substantiate yours.
Re: Crony capitalism may be cannibalizing productive capitalism in the U.S.
#220Earlier quoted context omitted.
The former and latter comments of yours in this post don't appear to agree with each other. Am I missing something?
The first part is sarcastic. It's a shame that you have to resort to "preventive self-denigrating" when voicing valid concerns about the FRS, which is basically a facade for a bunch of crooks who usurped the control over US money supply.
Ah. Yea I agree.