[lbo-talk] An Orgy of Speculation?

[brad]

If Brenner (_The Economics of Global Turbulence_) is correct, the rise
of speculation results from secular declining profitability of
investments in manufacturing.  This is a global systemic problem, so
the outcome of local elections (even in the US) does not matter,
especially that to date  no political party (right or left) has been
willing or able to go against the wishes  of "the markets" - at least
in OECD countries.

Wojtek
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Brenner has this exactly backwards.  It is the high rates of return in
finance that first help, then later undermine manufacturing (so I
guess it isn't exactly backwards but the idea that profits fell and
then people began investing to make money makes no sense).

I would also challenge Johanna on the notion that capital wants the
economy to be doing well before the election.  Mostly it wants to use
its power to scare politicians to do its bidding and if that means
risking the economy so be it (of course profits and high income
investors are not really at risk).

Brad