Wednesday, October 30, 2013

On the Unrealistic Expectations of Capital and the Rentier Class

The professor makes a(nother) good point.
This kind of behavior — ever-shifting rationales for an unchanging policy (see: Bush tax cuts, invasion of Iraq, etc.) — is a “tell”. It says that something else is really motivating the policy advocacy. So what is going on here? When I read Gross and others, what I think is lurking underneath is a belief that capitalists are entitled to good returns on their capital, even if it’s just parked in safe assets. It’s about defending the privileges of the rentiers, who are assumed to be central to everything; the specific stories are just attempts to rationalize the unchanging goal.
Defending the privileges of the rentiers has become the raison d'être of our entire governmental system.  The people who seek to "extract value" from others, the capitalists and their enablers, are responsible for the crash and the ongoing failed recovery under Obama who, despite his pseudo-liberal bona fides is as much an enabler of their greed as any Teabagging Republican.
What is the role of interest in this world? Interest, classically (and I do mean classically, as in Mr. Keynes and the), is the reward for waiting: there’s supposedly a social function to interest because it rewards people for saving rather than spending. But right now we’re awash in excess savings with nowhere to go, and the marginal social value of a dollar of savings is negative. So real interest rates should be negative too, if they’re supposed to reflect social payoffs.
But the baggers of tea and their economic enablers don't see it that way.  They want their money for nothing and their chicks for free...

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