Was just trying to explain to someone why everything is going to shit, specifically companies, and realized, I donβt fully get it either.
Iβve got the following explanation. The sentences marked with β???β are were Iβm lost. Anyone mind telling me, if theyβre correct and if so, why?
The past few years, central banks were giving out interest rates of 0% or even negative percentages. Regular banks would not quite pass this on, but you could still loan money and give it back later with no real interest payments.
This lead to lots of people investing in companies. As long as those companies paid out more money than those low interest rates, it was worthwhile. But at the same time, this meant companies didnβt have to be profitable, because they could pay out investors from money that other investors gave them???
This has stopped being the case, as central banks are hiking interest rates again, to combat inflation???
Laissez-faire economics and libertarian ideals (a-la Atles Shrugged) destroy society. I donβt know that anyone has nailed down a good balance of personal liberty, social justice, and (individual) wealth; I suspect one of the nordic models is closest, but fuck if I know.
What Iβm pretty sure of is that countries with laissez-faire models are like virulent diseases. Theyβre aggressive and successful, until they kill the host and collape. To compete, other countries have to adopt similar models. I think the host in this metaphor is the planet, but weβre seeing some indication that the social immune system in the US is responding, with a resurgence on union activity. And itβs possible that one of natureβs balancing tools (diseases such as COVID, SARS, etc) will help with the environmental impact; I donβt see that as a global community weβre doing so well at managing our environmental resources responsibly, so if nature doesnβt cause a great purge, we may simply extinct ourselves and moot the issue.
Edit: Whilst Iβm preachingβ¦ I believe capitalism is the best economic system weβve found. I believe some tools in capitalism have unintended, and deleterious consequences. In particular, the stock market, and usury. Both are tools that generate money directly from money (βinvestingβ and βinterestβ), and both IMHO are responsible for most of the excesses of capitalism.
