> This doesn't really make sense unless you can show that industrial or
> other "productive" firms were attempting to get funds and failing to do
> so. The money was not so much "taken out of production" as failing to
> find any production to invest in.
>
> Another way to put the same point is to ask _why_, in other periods,
> production offered higher profits than fiscal "products"? It's the
> change that has to be explained, not one situation in abstraction. Why
> did production cease to be profitable? A change in the humabnnature of
> rentiers?
>
> Carrol
The answer to the first part is that production based firms couldn't get investment because their own rate of return wasn't high enough for commercial credit banks to invest in them. And that is still true, which is why there is no `recovery' and we are still bleeding jobs. Cutting jobs, makes it look like the bottom line is improving. This is like thinking that weight loss due to blood loss, is healthy because its weight loss.
In other periods many of today's financial activities were either prohibited, too risky, or there were not the technical means necessary to carry them out.
Brick and mortar production systems didn't cease to be profitable. They ceased to be as profitable as other activities. For example the business where I worked as skill labor, during good years was returning 2 percent a year profit. A friend in the local mortgage market promised me an 18 percent return, if I could give him 10k for one year.
Now if you are an business investor which business would you invest in?