davel ,
@davel@lemmy.ml avatar

If you aren’t landed gentry then you aren’t relevant; the adults are speaking. Stock and real estate line go up, so the economy is great.

Michael Hudson: Asset-Price Inflation and Rent Seeking

The key to understanding the U.S. economy is not so much GDP as capital (asset-price) gains and the offsetting debt burden financing these gains. This financialized overhead is not real growth. It does not make the economy richer. This paper explains why, and provides a statistical format to measure the magnitude of rent extraction or the [finance, insurance and real estate] sector on the “product” side of the economy, deflating disposable personal income available to spend on goods and services, and capital gains on the “total returns” side, so as to show how most wealth is achieved not by actual production but by increasingly debt-financed asset-price inflation.

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