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Chapter 4: Early Days
CHAPTER 4: EARLY DAYS. The situation we are in today has evolved over many centuries. Economists had plenty of time and opportunity to comment – and comment they did. Only recently has it become highly controversial to notice that banks create money, let alone to discuss the implications.[1] This makes the comments of earlier economists particularly […]
Where Will You Be Seated at the Banquet of Consequences?
Where Will You Be Seated at the Banquet of Consequences? The Banquet of Consequences is being laid out, and so the question is: where will you be seated? The answer depends on two dynamics I’ve mentioned many times: what types of capital you own and the asymmetries of our economy. One set of asymmetries is the result of the system […]
The Crisis of Capital
The Crisis of Capital These three dynamics render capital increasingly vulnerable to catastrophic losses as backstops and distorted markets fail. The undeniable reality of the 21st century economy is that capital has gained while labor has stagnated. While various critics quibbled about his methodology, Thomas Piketty’s core finding–that capital expanded faster than GDP and wages/salaries […]
When Certainty Frays, Capital Gets Skittish
When Certainty Frays, Capital Gets Skittish The net result is capital is impaired in eras of uncertainty. As we look ahead to 2019, what can we be certain of? Maybe your list is long, but mine has only one item: certainty is fraying. Confidence in financial policies intended to eliminate recessions is fraying, confidence in […]
The Weighted Average Cost Of Capital
ittybiz.com The Weighted Average Cost Of Capital When it goes up, prices go down. It’s going up… This is a revisitation of a report I wrote back in late 2016, predicting the imminent end of zero-bound interest rates and warning of the downward pressure that rising rates, mathematically, must place on today’s elevated asset prices. […]
Make Capital Cheap and Labor Costly, and Guess What Happens?
Make Capital Cheap and Labor Costly, and Guess What Happens? Employment expands in the Protected cartel-dominated sectors, and declines in every sector exposed to globalization, domestic competition and cheap capital. If you want to understand why the global economy is failing the many while enriching the few, start with the basics: capital, labor and resources. […]
Return of the Euro Crisis: Italy Quakes, Rest of the World Shakes and Merkel’s Empire Breaks
Return of the Euro Crisis: Italy Quakes, Rest of the World Shakes and Merkel’s Empire Breaks Europe’s many fault lines are spreading once again, bringing the endless euro crisis saga back in 3-D realism. Italy gained a new anti-establishment government last week, even as Spain elected a new Socialista government that could crack Catalonia off from the […]
“Creating Wealth” Through Debt: the West’s Finance-Capitalist Road
“Creating Wealth” Through Debt: the West’s Finance-Capitalist Road Photo source David Shankbone | CC BY 2.0 Volumes II and III of Marx’s Capital describe how debt grows exponentially, burdening the economy with carrying charges. This overhead is subjecting today’s Western finance-capitalist economies to austerity, shrinking living standards and capital investment while increasing their cost of living […]
Dissecting the Madness of Economic Reason
Dissecting the Madness of Economic Reason David Harvey’s latest book provides a riveting reading of Marx’s Capital and a trenchant critique of a political and economic system spiralling out of control. A decade after the financial crisis of 2008, global capitalism remains in dire straits. Despite central banks providing a steady diet of low interest rates […]
Central Banks Have Killed Free Trade
Central Banks Have Killed Free Trade Defenders and critics of “free trade” and globalization tend to present the issue as either/or: It’s inherently good or bad. In the real world, it’s not that simple. The confusion starts with defining free trade (and by extension, globalization). In the classical definition of free trade espoused by 18th […]
Forget “Free Trade”–It’s All About Capital Flows
Forget “Free Trade”–It’s All About Capital Flows In a world dominated by mobile capital, mobile capital is the comparative advantage. Defenders and critics of “free trade” and globalization tend to present the issue as either/or: it’s inherently good or bad. In the real world, it’s not that simple. The confusion starts with defining free trade […]
A Stock Market Tumble Is the Correction We Need
A Stock Market Tumble Is the Correction We Need The Fed put us in this predicament. Only the market can get us out of it. Since hitting rock bottom in 2009, stock prices have consistently increased without much volatility — that is, until these first few days of February when the Dow Jones Industrial Average […]
The Rowboat (Wages) and the Yacht (Assets)
The Rowboat (Wages) and the Yacht (Assets) As I keep saying: the status quo has divested the working and middle classes. The reason why the status quo has failed and is fragmenting is displayed in these three charts of wages, employment and assets: wage earners (labor) are in a rowboat trying to catch the yacht […]
It’s Time to Retire “Capitalism”
It’s Time to Retire “Capitalism” Our current socio-economic system is nothing but the application of force on the many to enforce the skims, scams and privileges of the self-serving few. I’ve placed the word capitalism in quotation marks to reflect the reality that this word now covers a wide spectrum of economic activities, very little […]
