It's Rutting Season - part the second

It all began, IIRC, with that commie pinko professor from my undergraduate days: that Eccles was right. And, more to the point, that the USofA economy would not benefit from a morphing into the Switzerland of the Western Hemisphere. A number of essays here made such an assertion. Here is previous from 2013 (some go back to the beginning of this endeavor).

So, it was with some pride that I got here years before one of my more famous brethren. It must be noted that the author isn't of the tribe of commie pinko professors: he's "the chief economist at American Compass, a conservative economic think tank". But it is more true today than way back when. A few nuggets follow.

Since Mary Poppins's day, the financial sector as a whole — investment banks, hedge funds, private equity firms, cryptocurrency platforms and all the rest of it — has exploded as a share of the United States' gross domestic product. It now claims the highest share of corporate profits and attracts the highest share of top talent from top schools, in part by offering the highest compensation. But actual business investment has declined, to an average of 2.9 percent of G.D.P. over the past decade from 5.2 percent in the 1960s, when the film was released.

Yes, some of us took note of Blythe Masters folly at the time. Didn't stop the implosion from happening.

So, what do banks actually do these days, you might ask? Not much productive.

Less than 10 percent of Goldman's work in 2024, measured by revenue, was helping businesses raise capital. Loans of Goldman's own funds to operating businesses accounted for less than 2 percent of its assets. At JPMorgan Chase the figures were 4 and 5 percent; at Morgan Stanley, 7 and 2 percent. Even the efforts at helping to raise capital are misleading, because less than a tenth of it goes toward building anything new. The rest funds debt refinancing, balance sheet restructuring and mergers and acquisitions.

What's that Dire Straits line? "Money for nothing and chicks for free". And, of course, Jeffrey.

So few resources have gone toward new equipment, toward developing better ways to do things and toward hiring and training that productivity in America's manufacturing sector — the output generated per hour of labor — has been falling. More workers are now needed than in 2012 for the same result.

This should not be possible in a functional capitalist economy. In the past 20 years, the United States has gone from leading China in 60 of the 64 "frontier technologies" identified by the Australian Strategic Policy Institute to now trailing in all but seven.

Now, that's progress!! One might say: "oddly, no mention of Trump's pledge to restore American manufacturing??" Cass is, of course, still a card carrying member of the Right Wingnut/MAGA brigade, so I suppose he does have to mince words a bit.

I'll close with this tidbit, which I've long forgotten:

We should ban stock buybacks, which were illegal until the 1980s.

(It was 1982.)

More interesting, while that ends the graph, here's how it begins

We should reform our laws so that when companies go belly up, workers and their communities get to join the line for compensation ahead of the lenders who financed the mess.

Now, I don't know about you, but those are the words of a Traitor To His Tribe.