As I said I'm not sure that buy into Brenner's argument. I think I've said on here before that I'm inherently suspicious of any attempts to map out broad historical patterns through what are, at the end of the day, strictly logical arguments based on meagre amounts of data (relatively speaking, of course). For me macro-economics, especially of the historical variety, is, whether critical or functional, a political tool.
>
>
> When income is redistributed upward, it can result in a situation where the
> rich save more and everybody else borrows more (from the rich). This might
> be what happened over the past few decades. But if it happens, it won't
> depress aggregate demand as long as the non-rich are borrowing enough to
> offset the greater saving of the rich. All that borrowing might make the
> financial system more fragile, though.
What if, as I said, instead of this income being saved, it was driven back into the financial sector to realise, well, we could say profit or we could say higher rates of interest, I don't think it makes a huge difference? To me this conception is a very... em... expressive way of looking at the dynamics of the current crisis. It tends to emphasise the fact that people were receiving reduced wages so that certain members of the bourgeoisie could use these appropriated quantities of wealth to, well, eventually rob certain members of the working-classes of their assets, their tax dollars and their dignity.
>
> The larger volumes of saving and borrowing will also expand
> financial-sector balance sheets and thereby redistribute income toward
> employees and shareholders of financial-sector firms. But it will not
> (necessarily) result in the allocation of more labor or capital goods toward
> those firms. In other words, it doesn't reduce the capacity of the
> non-financial sector to produce output, but it does increase the ability of
> individuals in the financial sector to appropriate the output that is
> produced.
>
I still think you're missing a key point in Brenner's argument. He's not arguing that finance is leeching off the "real" economy. For him its a symptom of an underlying problem and not the problem itself. In this sense, I agree with Brenner and think that although some of his arguments may be flawed (show me an airtight macro-economic argument...), this isn't a half bad message to be disseminating.