By Michael E. Lewitt
Within the demise of Capital, revered portfolio supervisor and longtime funding specialist Michael Lewitt appears to be like at how the U.S. economic climate has more and more been ruled by way of temporary hypothesis instead of commercial enlargement lately. those disastrous developments, defined the following as financialization, forget about the truth that capital itself is a hugely risky method instead of a hard and fast item or type. due to our failure to appreciate the real nature of capital, now we have built a monetary and regulatory approach that does precisely the contrary of what it may be doing—favoring obscurity over transparency and fomenting instability instead of growth.In explaining the place we've long past improper Lewitt pulls few punches in criticizing the various counterproductive forces that experience resulted in the dying of capital—including Wall highway practices reminiscent of inner most fairness and derivatives trading—which he perspectives either as economically unproductive and morally faulty. web page by means of informative web page, this well timed guide:Addresses "financialization" and its results, corresponding to a weaker U.S. greenback, the destruction of yankee industries, and the lack of American fiscal and political influenceExplores crucial facets of capital and capitalism during the prism of 4 of the world’s nice financial thinkersDiscusses how the felony method aided fiscal weakening through privileging temporary funding goalsCalls for politically debatable reforms equivalent to stricter law of hedge money and personal fairness agencies, banning bare credits default swaps and dependent funding autos, and principles-based reforms to enhance systemic stabilityFinancial reform is required to ensure capital doesn't die back. jam-packed with in-depth insights and sensible recommendation, The demise of Capital is not only a play-by-play of the hot monetary drawback, yet an unique and passionate research of the developments that resulted in it and what could be performed in a regulatory feel to handle the issues.
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Extra info for The Death of Capital: How Creative Policy Can Restore Stability
Example text
Capital Is Unstable These three essential attributes of capital lead to one inevitable conclusion—capital tends toward instability rather than stability. A process that can change form and is subject to human perception is hardly a candidate for stability. And that is exactly what we find throughout history: Capital is a highly unstable concept. This quality remains poorly appreciated, and as a result, capital remains poorly regulated and managed. If we can come to a better understanding of capital, how it lives and how it dies, we can hope to corral it to better uses.
But it would be more correct to say that this capital was murdered. And as much as we would like to blame failures of human character and emotion (greed and fear), we must also blame failures of human intellect (stupidity). The most highly educated segment of our population—the PhDs, the MBAs, the JDs—made inexcusable errors of judgment, raising legitimate questions about the utility of such degrees when they fail to include a modicum of common sense and, more important, common decency in their curricula.
A year after the crisis arguably reached its peak in the fourth quarter of 2008, the damage was still building in terms of lost jobs and abandoned hope. And the challenges facing Americans and the rest mankind are in no way diminishing. Global Threats Require Systemic Stability The world desperately needs a healthy financial system as it faces unprecedented strains on its resources and challenges to human survivability in the twenty-first century and beyond. Finance should not be treated like just another national pastime that can be followed through the media like baseball or cricket.