Capitalism's Deeper Problem by Richard Wolff

[adirondacker]

"Recent press reports refer to troubling price increases for such assets as real estate, government bonds, companies targeted for acquisition and artwork. A New York Times front-page headline read “The Everything Boom, or Maybe the Everything Bubble.”

Yet while asset prices soar, the production of goods and services, employment and workers’ incomes are not recovering and resuming growth. Instead, Western Europe, North America and Japan are stuck in a longer, deeper crisis than almost anyone expected. Millions have left the labor force. Wages, benefits and job security are declining; the so-called “middle classes” are evaporating. Having promised “recoveries,” desperate governments inject massive new quantities of money into their economies. What they accomplish most are fast-rising asset prices.

Given their persistent economic problems, consumers cannot borrow or spend more. Businesses neither borrow nor productively invest all the new, cheap money because they could not sell the extra output to distressed consumers. Instead, the newly injected trillions enable the speculation that drives up asset prices. The owners of those inflating assets celebrate a “recovery” that bypasses most of their fellow citizens. The Great Recession lumbers on.

To understand this puzzling and dangerous situation requires digging deeper than most current discussions of our economic problems. The global crisis since 2007 has captivated discussion about capitalism as a system. Yet we are faced now with more than just this latest of capitalism’s endlessly recurring “downturns” (or recessions or depressions). We see combined an extremely serious downturn in most of capitalism’s old centers, extremely unequal growth in its new centers and a resurgent global speculative bubble. This points to a deeper, worldwide problem that now challenges and threatens contemporary capitalism."

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https://www.commondreams.org/view/2014/07/16-3

[cantbeserious]

1. Thank You For Sharing

eom

[IrishAyes]

2. re Rising Asset Prices

Sometimes people wonder how I can own a decent house free and clear on such a tiny income. Besides other factors, I was fortunate enough to buy my first one eons ago. For most of the time since, including now, I can't afford to rent. If I did, at best it might be one of the fancier cardboard boxes in some urban jungle. I constantly moan and groan because I find the social/political/religious atmosphere of the remote Midwest distasteful - but all the while I remember that if I had retired anywhere else that did have culture and diversity, most of the perks would still be entirely out of reach for me and I'd be subject to the most crushing effects of poverty. At least here very little I want is near enough to rub salt in the wound.

Capitalism? Not my cuppa tea at all.

[BillZBubb]

3. Good Article