Dylan Ratigan interviews Yves Smith on where the money goes (h/t rjs):
Smith: Investors Are Afraid of Suing the Big Banks for Fear the Government Will Retaliate
On this episode of Greedy Bastards Antidote, we’re covering a new term from our upcoming book. This week, we’re focusing on extractionism. Joining us to discuss it is Yves Smith of nakedcapitalism.com. She is author of ECONned: How Unenlightened Self Interest Undermined Democracy and Corrupted Capitalism.
This week, I talk with Yves Smith, and she opened my eyes to some radical stuff going on in the capital markets. Big Banks are extracting capital for themselves with such power that investors are actually afraid to go to the courts for redress.
Yves said that one prominent securities lawyer told her “he knows investors who he said if Jamie Dimon came into somebody’s house and killed the children of these people, he said they would be afraid to call the police.” That’s how bad the extraction has gotten. And that’s not capitalism.
But first, what is extraction, and how is it the opposite of capitalism? How can extractionist systems have all the characteristics of capitalism, while hiding the elimination of productive resources over time?
Greedy Bastards like to call themselves capitalists, but what they’re actually doing is the exact opposite: it’s extractionism: taking money from others without creating anything of value; anything that produces economic growth or improves our lives.
Under an extractionist system, we find lose value at a faster rate over time, while we need to be creating it. Instead of giving people incentives to make good deals where both sides can benefit, extractionist systems rewards those who take and take some more, and give nothing in return. Sadly, extractionism has crept its way into every aspect of our economy — it’s everywhere, from trade to taxes to banking…
“Sadly, extractionism has crept its way into every aspect of our economy — it’s everywhere, from trade to taxes to banking.”
Crept? Crept? Sorry, folks, it has been there all the time. The rise of capitalism did not eliminate it, it simply changed who does the extracting. They didn’t call them Robber Barons for nothing.
It is not capitalism!
The invisible hand extracts all costs, but that is not happening in the US, never has.
The Obama administration needs to dust off the antitrust books and take a look.
In the “really dumb” department, for a while DOJ and the FTC were hinting actions against those health care providers who did what PPACA wanted them to do, but that seems to have calmed down. Someone at the White House must have stepped in.
It’s really sad that the fell Rich Lords have no one to protect them from the meanie banks.
One would think such all knowing Gods who cheered the Regan on without any doubt or thought would use one tenth of their Awesomeness and Godhood to stop the banks from taking their hard-stolen cash.
Ask the Ogliarchs of Russia about how the People stood up to them when the government came for them.
OOPSIE, the People didn’t care.
Poor, poor Gods.
It is the only capitalism we have ever had.
But is not extractionism the very definition of the financial services industry? It produces no real goods and just moves bits around on computers. (Used to move paper). Or put another way its the toll booth between the investor and the user of capital. Its just recently that they raised the toll.