Part 4 Booms and busts punctuate the history of capitalism; it is a systemic problem.
Remember General Motors, producer of automobiles? Over the last thirty years, General Motors created a subsidiary called GMAC, General Motors Acceptance Corporation. It is a bank. It lends money. It began by lending money to people to buy cars because their wages couldn’t pay for them. Then GMAC discovered they could make more money off the interest of the loan than they could make a profit from the car. General Motors became a bank, much more interested in being a bank than being a car manufacturer. They branched out, they became a general lender and went into the mortgage business.
If we become a nation of exploding profitably on the one side, and a desperately exhausted population wanting and needing and measuring its self-worth regarding rising consumption, we have a dysfunctional combination.
People could not pay the money back.
Booms and busts punctuate the history of capitalism; it is a systemic problem.
The lunacy of capitalism has two sides:
One is the short-sightedness of the business and banking community that has a bottom line of profit;
The other is the wage-worker who falls for the exploitation and manipulation