"So that's a mechanism by which capital has been shifted out of production and into the markets. It happened because Wall Street, with people like Michael Jensen to think for them, pressed CEOs to maximize profits and pass along as much as possible to shareholders. Part of their argument was that managers invested too much - and from the shareholders' point of view, they were right. This intra-class pressure did massively increase the profitability of capital between 1982 and 1997 or 2006. At first there was a battle between Wall Street and CEOs, but under pressure of takeover and tempted with large personal stock profits, the CEOs came around. But it's not clear where this sort of thing goes politically. The temptation is to see finance as some sort of neoplasm, but it's really a class formation mechanism, a means by which owners assert their power."
Well, let's see if they miscalculated. First they sucked all the capital out of production, then they overleveraged, and then they collapsed...taking the whole economy with them.
Next the taxpayers foot the bill for building the economy back up, and when that's done, you can lather, rinse, and repeat. In terms of finance sucking it all up again.
It's really a political problem not an economic problem. Some day somebody will see that.
I'll hazard the guess that the "left" has a massive re-education job on its hands, to persuade people that prosperity is possible without profits; that it's possible to get an appendectomy, education, doghouse, etc., without someone getting rich first. It's a simple gestalt switch here...
At the office Thursday, as one co-worker was grumbling about the collapsing housing market, I opined from within the confines of my cubicle that "capitalism is so fucking efficient, pretty soon we'll all be sleeping out in the streets, next to rows of empty houses." First he laughed, and then he said something about how the problem was that there's too many people. It was such a non sequitur, I'm still not sure how to reply....
Anyway, it's going to be interesting. I've decided if I lose my job and can't get another, I'll start a daycare...in French. There's got to be six hoity toity families in the SF bay who will want their kids bilingual by first grade.
Joanna