by Summary:
Deregulated banking in rich countries delivers more “investment” in speculative asset markets, not productive businesses. Deregulation of the financial sector has not improved growth as it was said it would, but rather the opposite has happened, as money went mainly into the speculation of assets instead. I read years ago in the financial section of the Guardian, when it was still a decant paper, how the pension funds were just putting all their money into property creating house price booms. As property prices skyrocket, pension fund profits dramatically increased creating huge bonuses for pension funds managers, but when the crashes came and everyone lost money, the pension fund managers kept their massive bonuses. The article then went on to say that the pension funds
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Deregulated banking in rich countries delivers more “investment” in speculative asset markets, not productive businesses. Deregulation of the financial sector has not improved growth as it was said it would, but rather the opposite has happened, as money went mainly into the speculation of assets instead. I read years ago in the financial section of the Guardian, when it was still a decant paper, how the pension funds were just putting all their money into property creating house price booms. As property prices skyrocket, pension fund profits dramatically increased creating huge bonuses for pension funds managers, but when the crashes came and everyone lost money, the pension fund managers kept their massive bonuses. The article then went on to say that the pension funds
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Mike Norman considers the following as important:
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Deregulated banking in rich countries delivers more “investment” in speculative asset markets, not productive businesses.
Deregulation of the financial sector has not improved growth as it was said it would, but rather the opposite has happened, as money went mainly into the speculation of assets instead.
I read years ago in the financial section of the Guardian, when it was still a decant paper, how the pension funds were just putting all their money into property creating house price booms. As property prices skyrocket, pension fund profits dramatically increased creating huge bonuses for pension funds managers, but when the crashes came and everyone lost money, the pension fund managers kept their massive bonuses.
The article then went on to say that the pension funds should have been regulated to invest in industry instead, especially new industries, like green technology, computer and software design, etc. Even the British inventors of graphine, a remarkable new substance, had trouble getting British finance interested, and now the Chinese are world leaders in it. And Dyson wanted his company to be British but he had to take it to China instead.
In these emerging new industries young people could have got well paid, highly skilled jobs, with university degrees that would have been worth having. And there would have been more apprenticeships and good jobs for unskilled people. Then they would have produced the profits to keep the pension funds in good order, giving retired people excellent pensions.
Most people who vote for right-wing parties have no idea how much they and their children have lost, while a few at the top raked it in. Now these people want to privatise the NHS so they can take off half the money the government spends on healthcare, while whacking prices up as well. And if you add in the squandered North Sea oil, you can see how the British people have been had over.
Just think, excellent highly skilled well paid jobs, less reliance on fossil fuel helping to mitigate the Middle Eastern problem, low cost renewable energy, better pensions with perhaps earlier retirement creating more jobs for young people. All lost because of right-wing economics - neoliberalism! Now a third of the British people are the poorest in Northern Western Europe.
These new empirical findings support a much older body of theory that argues that credit markets, left to their own devices, will not optimise the allocation of resources. Instead, following Joseph Schumpeter’s, Keynes’ and Hyman Minsky’s arguments, they will tend to shift financial resources away from real-sector investment and innovation and towards asset markets and speculation; away from equitable income growth and towards capital gains that polarises wealth and income; and away from a robust, stable growth path and towards fragile boom-busts cycles with frequent crises.