Forum Post: Neoliberal Heart Disease

Consider this analogy: In a hypothetical casino card game the house takes 5% of every pot. If 10% of the money at the table is on average played in each hand, then the house takes 0.5% of the money in the game on each rake. After 200 hands, 100% of the money that is on average at the table has been taken by the house. The only way the game may continue is to have more money come to it. The winners, of course, smell the new blood and even anticipate it greedily. And the biggest winner over a time is always the house. Until the neoliberal ideologues took over, the biggest difference between a casino bank and finance was that the gaming house took a bigger cut of the handle.

George Monbiot wrote: "...Neoliberalism sees competition as the defining characteristic of human relations. It redefines citizens as consumers, whose democratic choices are best exercised by buying and selling, a process that rewards merit and punishes inefficiency. It maintains that "the market" delivers benefits that could never be achieved by planning...." That is from an essay on Neoliberalism that is worth reading at truthout.org. see the internet address below.

Neoliberal prophets, like Milton Friedman and his acolytes Thatcher and Reagan, promoted "freedom of the marketplace," by crushing unions, outsourcing and privatization. All resulted in lower wages and higher prices for most of us. Their "freedom" is like the freedom to enslave ... an irony as devoid of moral character as it is of humor. It surprises only the true believers, ie. most Americans, that we've come down so far as a result of the mostly unrecognized failure of that utopian scheme. So far the only answer our leaders have offered is to double down on the stupidity of it all.

Neoliberalism has not succeeded as a viable alternative to the Keynesian economic formula, whose debt burden was not problematic until the late 1970s, when it grew at an increasing exponential rate due to usurious interest rates. The Neoliberal solution. of cutting social spending did not result in less debt. The cons just borrowed and spent even more on military, which explodes many of its assets, and other handouts to corporate grifters like the bailouts of the financial sector. That resulted in a booming stock market of purely abstract activity in which investment has come to mean the seeking of economic rents instead of the funding of material production. It no longer grows the material [real] economy. What has been promoted as investment today is in reality a parasitic disease of the economy, as is the wasteful military and other spending and investment that produce no consumables.

Monbiot wrote the article quoted above in 2016. In it he calls for an alternative to neoliberalism, which imploded in 2008. We know that reinvention of our economy to one that works for all the people is what we must have. How do we know and do that? Monbiot points out that the greatest harm produced by neoliberalism is the financialization of the economy, resulting in rent seeking concentration of wealth rather than production and distribution of real goods and material services. The thick skulls of the indoctrinated true believers, who docilely support their own subjugation through cultivated ignorance, have yet to be penetrated by a simple truth. The success of the stock market measures the gains of the billionaire class, which come at the expense of losses to the real economy. Sadly, I don't know that anything more substantial than words can be thrown into the chasm of ignorance the neoliberal movement has delved in our minds. But I do know that we must have an economy of, by and for all the people, if we are to survive.

Remember the casino analogy I opened with? I know that its mechanism does not fit that of the FIRE sector very closely. But compound interest on debt and compounded profits of investors and speculators do grow the money supply exponentially and result in the billionaire class of Wall St. Oligarchs gaining everything in the end. They are the greatest threat to our long term survival. Of course they also profit by the destruction of the planet and other calamities that may extinguish us all before the ultimate and inevitable economic collapse.

The exponential growth of the FIRE sector and the real economic energy it dissipates is comprised of a complex of elements that require much more discussion. I may never adequately cover the topic. But I intend to keep on truckin'. In they meantime, try to calculate the real probability that one may grow rich.

https://truthout.org/articles/neoliberalism-the-ideology-at-the-root-of-all-our-problems/

Video link https://youtu.be/gGEtr_EGhKg