Here we go again? Wall Street is snapping up assets of "emerging economies" according to an editorial in the International Herald Tribune, though not without their inherent risk (remember the Mexican Economic Crises of 1994, the Asian Crisis of 1997, the Argentinean Crisis of 2002) because they offer higher returns and immediate profit. According to the bank friendly International Institute of International Finance, $825 billion will flow into developing countries this year alone, a rise of 42% more than in 2009.
That being said the question that now needs be asked: are these investments in emerging markets impacting the ability of these Wall Street banks and bank holding companies to service the capital starved from the American economy? The Federal Reserve, in order to stimulate growth is making almost limitless funds available through their QE2 (quantitative easing program) to bank holding companies and their ilk at virtually no cost.
Rather than helping to finance the day-to-day and investment needs of American business, it takes neither competence nor vision to borrow at the Fed window and use near costless funds investing them in emerging market financial instruments, paying bountiful interest rates and collecting fat bonuses at the end of the year. If the investments blows up sometime down the road, who cares, the bonuses have been paid and as for the American economy, well it will have helped the real estate market in the Hamptons and provided luxurious visits to Thailand and environs. But what the funding was meant to be used for, to grow the American economy, well don't worry, Wall Street will have done well and they are part of the American Economy too.
Capitalism is like a wild horse, you have to tame and saddle it without breaking its spirit if you expect it to serve both its own interests and the nation's.
Indeed, when capitalism becomes obsessed with huge short term profits, it hurts the rest of us and quite often does itself in as well. It might hate the nanny state, but when it goes on childish binges, capitalism could well stand an experienced nanny.
Perhaps this is why China might eat our lunch. It currently retains the best aspects of capitalism, while at once employing common sense direction of it that is also highly beneficial to the state.
http://www.counterpunch.org/hudson10112010.html
The first change will be equal Trade not free trade, if you want to sell in America you have to match what it costs to produce in America, a tax you say? perhaps but being the golden goose of sales we can demand this. Thus doing away with the benefits of cheap labor, no taxes and other incentives to move out of country. The second is to reinstate the leash laws on banks and Wall Street and medical institutions. The third is to rebuild, retool and reeducate this land Rebuilding the cities, power and transportation, retooling new and all business to be modern and reeducation for American workers and schools. Fourth is to set up as a commercial program with some government leash on them space exploration. This will spin off thousands of new business interest's and many thousands of jobs.
America will be the safe growing country of the future. The money may today be going to the new growth countries, when America removes the military, starts to rebuild itself and again has a bright future where do you think the money will flow to? A country that could fail or a powerhouse!
The American Party, pro-American; government, worker and business. Willing to tame the banks and wall street.
http://www.sonyclassics.com/insidejob/
Inside Job - Movie Website for the Documentary Film
"From Academy Award« nominated filmmaker, Charles Ferguson ("No End In Sight"), comes INSIDE JOB, the first film to expose the shocking truth behind the economic crisis of 2008. The global financial meltdown, at a cost of over $20 trillion, resulted in millions of people losing
their homes and jobs. Through extensive research and interviews with major financial insiders, politicians and journalists, INSIDE JOB traces the rise of a rogue industry and unveils the corrosive
relationships which have corrupted politics, regulation and academia.
Narrated by Academy Award« winner Matt Damon, INSIDE JOB was made on
location in the United States, Iceland, England, France, Singapore,
and China..."
"Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration".- Abraham Lincoln
Its a zero sum game.
The public has been fed the fantasy that if you have 'investments' then you're in on the action, you're playing the 'wealth creation' game with the big boys. So better not regulate! But really, small investors are little more than a 'human shield' to be used by the oligarchs. You suffer all the blows while they reap all the benefits without harm.
WTF happened?
Oh;the emerging economic and therefore political power of the middle class happened. Then,Nixon happened. Then,China happened. Then Reagan happened.
Spiraling downward ever since.
But, I jest... ( I hope)