{"id":16197,"date":"2016-01-08T11:45:55","date_gmt":"2016-01-08T16:45:55","guid":{"rendered":"http:\/\/olduvai.ca\/?p=16197"},"modified":"2016-01-08T11:45:55","modified_gmt":"2016-01-08T16:45:55","slug":"2016-theme-5-the-systemic-failure-of-high-finance","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=16197","title":{"rendered":"2016 Theme #5: The Systemic Failure of High Finance"},"content":{"rendered":"

2016 Theme #5: The Systemic Failure of High Finance<\/a><\/h3>\n

This week I am addressing themes I see playing out in 2016.<\/i><\/p>\n

A number of systemic, structural forces are intersecting in 2016. One is the failure of high finance to fix the global economy’s systemic problems.<\/b><\/p>\n

The operative conceit of the past 7 years has been that high finance can fix whatever’s broken in the world’s economies.<\/b>\u00a0According to this narrative, all the world needed to boost “growth,” employment and profits was lower interest rates, more liquidity, reverse repos and some other fancy financial footwork.<\/p>\n

Once all this high finance generated more borrowing by debt-serfs, property developers, students, corporations buying back their shares and financiers skimming billions from asset bubbles, systemic problems would be dissolved or mitigated.<\/p>\n

Cheap credit, asset bubbles and immense profiteering by financiers would heal all wounds and make everything better for everyone, even those at the bottom layer of the economy.<\/p>\n

Unfortunately, this isn’t true. High finance and cheap credit have intensified structural problems such as rising inequality, not resolved them.<\/b><\/p>\n

The implicit promise of the\u00a0neoliberal project<\/i>\u00a0is that liberalizing private-sector markets and credit will magically grease the processes of growth and widespread prosperity.<\/p>\n

When economies have the right systems in place<\/b>–decentralized, somewhat free markets, an entrepreneurial spirit, many unmet needs, idle productive capacity and a credit-starved real economy–freeing up static markets and credit can unleash the productive capacity of the bottom level of the economy.<\/b><\/p>\n

But in economies dominated by state\/private monopolies and cartels, neoliberalism simply funnels the profits of financialization to the few at the expense of the many, and at the cost of heightened instability and insecurity.<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n","protected":false},"excerpt":{"rendered":"

2016 Theme #5: The Systemic Failure of High Finance This week I am addressing themes I see playing out in 2016. A number of systemic, structural forces are intersecting in 2016. One is the failure of high finance to fix the global economy’s systemic problems. The operative conceit of the past 7 years has been […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[127,7223,195,2802,2508,11558,425,6996,4924],"class_list":["post-16197","post","type-post","status-publish","format-standard","hentry","category-economics","tag-charles-hugh-smith","tag-cheap-credit","tag-debt","tag-debt-serfdom","tag-decentralisation","tag-high-finance","tag-inequality","tag-neoliberalism","tag-oftwominds"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/16197","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=16197"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/16197\/revisions"}],"predecessor-version":[{"id":16198,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/16197\/revisions\/16198"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=16197"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=16197"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=16197"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}