Various recent links related to problems with the current state of capitalism.
While this profit-making capitalism has worked well in this
way, it has also been intolerably imperfect in providing equal
opportunity. It has failed to deliver people equal opportunities to
be productive if they can be and to take care of the basic needs
of people who can't be. It also doesn't create limits on how bad
people's living conditions can be or on how decadent spending can
be. To me, most tragically, it allows vast numbers of children
to grow up in environments of violent squalor, which is both
economically and socially bad. It is economically bad because the
costs of having large numbers of unproductive people are enormous
compared to the benefits of having productive people. And it is
socially bad because a system that doesn't provide equal opportunity
can't be considered fair - and unfair systems eventually lead to
disruptive social conflicts.
...
To make society work better, the new system must both increase
the size of the pie and divide it well. Our ability to consume is
dependent on our ability to produce, not the amount of money we get
in the mail. You can't eat money. Somebody must get paid to produce
and deliver what we consume. And we can't raise our living standards
by just giving people money - they need to be incentivized to
produce, and that must be done cost-effectively through some system
that is not administered from the top. Most fundamentally, that
system must strive to provide 1) equal opportunity to all those
who have the potential to produce (because that is both most fair
and most productive) and 2) basic needs to those who are unable to
(because that is humane and what is fundamentally needed to have
a good community).
American Interest interview with Larry Summers
Someone put it to me this way: First, we said that you are going
to lose your job, but it was okay because when you got your new
one, you were going to have higher wages thanks to lower prices
because of international trade. Then we said that your company
was going to move your job overseas, but it was really necessary
because if we didn't do that, then your company was going to be
less competitive. Now we're saying that we have to cut the taxes
on those companies and cut the calculus class from your kid's high
school, because otherwise we won't be able to attract companies to
the United States, and you have to pay higher taxes and live with
fewer services. At a certain point, people say, "This whole global
thing doesn't work for me," and they have a point.
...
So the case for regulation is not to be anti-business. Regulation
needs to be supported because it enables the vast majority of
businesses who want to do right by society to do so and still be
able to compete. That's how the case for regulation needs to be
framed. We should not be waging jihad against business. We should be
waging jihad against those who put profit ahead of every other value
in the society.We should not be waging jihad against business. We
should be waging jihad against those who put profit ahead of every
other value in the society. And that's where in the emphasis on
profit, we have gone a bit awry.
Ben Hunt, Epsilon Theory
Meanwhile, back at the ranch, the Big 4 airlines will be accessing tens of billions of dollars in cash grants and easy 10-year loans, all explicitly designed to support entrenched management and equity shareholders. But hey, fret not, concerned citizen! Management will be prevented from making more stock buybacks until Sept. 30, 2021. That's a whole eighteen months of no stock buybacks, so don't tell me that Wall Street doesn't understand shared sacrifice. And yikes! Management will also have to get by on their current salaries for the next three years, as hard as it may be to imagine the privation and human misery that will entail.
Count Ritholtz Wealth Management among the $1bn-plus RIAs which have taken out government-backed coronavirus relief loans.
Results show that investment in stocks led to a more rightâleaning outlook on issues such as merit and deservingness, personal responsibility, and equality. Subjects also shifted to the right on policy questions. These results appear to be driven by growing familiarity with, and decreasing distrust of markets. The spread of financial markets thus has important and underappreciated political ramifications.