{"id":26288,"date":"2017-09-30T17:57:20","date_gmt":"2017-09-30T22:57:20","guid":{"rendered":"http:\/\/olduvai.ca\/?p=26288"},"modified":"2017-09-30T17:57:20","modified_gmt":"2017-09-30T22:57:20","slug":"the-financialization-of-america-and-its-discontents","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=26288","title":{"rendered":"The Financialization of America&#8230; and Its Discontents"},"content":{"rendered":"<div class=\"row\">\n<h3 class=\"small-12 medium-10 medium-centered columns featured-image\"><img decoding=\"async\" src=\"https:\/\/dweaay7e22a7h.cloudfront.net\/wp-content_3\/uploads\/2017\/09\/shutterstock_623765318-650x360.jpg\" alt=\"The Financialization of America... and Its Discontents\" \/><\/h3>\n<\/div>\n<div class=\"row content-body\">\n<div class=\"small-12 medium-10 medium-centered columns\">\n<div class=\"row\">\n<h3 class=\"small-12 medium-2 columns\"><a href=\"https:\/\/dailyreckoning.com\/financialization-america-discontents\/\">The Financialization of America&#8230; and Its Discontents<\/a><\/h3>\n<div id=\"single-article-body\" class=\"small-12 medium-10 columns single-article\">\n<p>Labor\u2019s share of the national income is in freefall as a direct result of the optimization of financialization.<\/p>\n<p>The Achilles Heel of our socio-economic system is the secular stagnation of earned income, i.e. wages and salaries. Stagnating wages undermine every aspect of our economy: consumption, credit, taxation and perhaps most importantly, the unspoken social contract that the benefits of productivity and increasing wealth will be distributed widely, if not fairly.<\/p>\n<p>This chart shows that labor\u2019s declining share of the national income is not a recent problem, but a 45-year trend: despite occasional counter-trend blips, labor (earnings from labor\/ employment) has seen its share of the economy plummet regardless of the political or economic environment.<\/p>\n<p class=\"centered\"><img decoding=\"async\" class=\"centered aligncenter\" src=\"https:\/\/dailyreckoning.com\/wp-content\/uploads\/2017\/09\/DR092917_down.png\" alt=\"Down, Down, Down\" \/><\/p>\n<p>Given the gravity of the consequences of this trend, mainstream economists have been struggling to explain it, as a means of eventually reversing it.<\/p>\n<p>The explanations include automation, globalization\/offshoring, the high cost of housing, a decline of corporate competition (i.e. the dominance of cartels and quasi-monopolies), a failure of our educational complex to keep pace, stagnating gains in productivity, and so on.<\/p>\n<p>Each of these dynamics may well exacerbate the trend, but they all dodge the dominant driver of wage stagnation and rise income-wealth inequality: our economy is optimized for financialization, not labor\/earned income.<\/p>\n<p>What does our economy is optimized for financialization mean?<\/p>\n<p>It means that capital and profits flow to the scarcities created by asymmetric access to information, leverage and cheap credit \u2014 the engines of financialization.<\/p>\n<p>Financialization funnels the economy\u2019s rewards to those with access to opaque financial processes and information flows, cheap central bank credit and private banking leverage.<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>The Financialization of America&#8230; and Its Discontents Labor\u2019s share of the national income is in freefall as a direct result of the optimization of financialization. The Achilles Heel of our socio-economic system is the secular stagnation of earned income, i.e. wages and salaries. Stagnating wages undermine every aspect of our economy: consumption, credit, taxation and [&hellip;]<\/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":[127,11023,1573,477,16234,827],"class_list":["post-26288","post","type-post","status-publish","format-standard","hentry","category-economics","tag-charles-hugh-smith","tag-daily-reckoning","tag-financialization","tag-labor","tag-national-income","tag-united-states"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/26288","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=26288"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/26288\/revisions"}],"predecessor-version":[{"id":26289,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/26288\/revisions\/26289"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=26288"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=26288"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=26288"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}