Thom Hartmann makes a case that we're driving the economy to another Great Crash.
The denial of fundamental economic principles is setting the world up for another Great Crash.
... corporate banks have ... discovered that instead of lending money to working-class people to buy homes or cars, it has become more profitable to simply borrow from central banks at very low interest rates, often less than 1%, and then park that money in government treasuries which pay 2% or 3%—in effect loaning the country's money back to the same government at a profit.
... the simple Econ 101 maxim, dating back to Adam Smith: demand is what drives economies, and wages are the principal driver of demand.
As wages flatten or drop, and as the ability of unemployed people to continue buying things is undercut by Republican efforts to end long-term unemployment over the past six months, demand falls.
Meanwhile, large corporations, wealthy people, and banks are all making money simply by playing with money. This "financialization" of our economy is driving us to the edge of a massive crash.
Wages for working people, not the wealth of the rich, corporate income, or banking profits are what both drive and sustain an economy. As long as those wages remain stagnant or falling, there will not be sufficient demand to keep an economy from collapsing under the weight of its own high-end gamblers and the growing debt of its young and working-class people just trying to get by. [emphasis mine]
Excellent! And it is the claim of Steve Keen, Joe Stiglitz, Raghuram Rajan, Didier Sornette and others that other bubbles are building and will crash. When? How far?
“Let’s not lose the chance, the warning that we have been given, because this is going to come back and what we need to do is put our house in order before.”
~ Raghuram Rajan
"We learn that most systems have pockets of predictability. It is possible to develop advance diagnostics of crises so that we can be prepared, we can take measures, we can take responsibility, and so that never again will extremes and crises like the Great Recession or the European crisis take us by surprise.