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Affluent Investor | May 28, 2017

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Financialization of U.S. Economy & An Emerging Ideological Civil War Brewing

New York Stock Exchange (Photo by Perpetual Tourist) (CC BY) (Resized/Cropped)

New York Stock Exchange
(Photo by Perpetual Tourist) (CC BY) (Resized/Cropped)

It isn’t difficult to discern the dominant trends that have emerged from Obama’s interventionist central bank policies.  The surging debt, fictional (politicized) unemployment rates, currency interventions etc… Everyone familiar with business indices is familiarized with the growth of the top 1%.  What hasn’t been well told is the impact financial engineering has had on the U.S. outside highly dependent capital markets.  Our economy has become so dependent on financial engineering that we no longer perform research and development.  The U.S. isn’t doing manufacturing or serious capital intensive innovation.  How is this turned around?

To reverse the dominant trends toward financialization and the bumping of leveraged balance sheets, broad capital market reform indicative of both fiscal and monetary reform would be required.  Wall Street must be reintegrated back into main street.  If we fail at this during our post 2016 election, then the divisions of our political economy will become permanent.

This entire reality is embodied in the moribund state of U.S. IPO’s.  We simply don’t do them anymore.

The public knows a thing or two that Congress could consider, namely that employment and tax reform is required.  Why?  Because growth alone cannot come from government. If civil society is to grow, productive members of our society must be permitted to enjoy capital/equity formation.  The U.S. citizenry is ready to be a breakout nation, but the formal institutions of governance continue to confiscate the very capital required to succeed.

The post 2016 election gamble has begun.  And its contours run against the very monolithic institutions that sustained previous growth.  A new ideologically driven civil war is emerging.  Place your monies on those few brave, bold citizens moving against the grain.

A Convention of the States is off and running.

 

Originally published on William Holland’s website.

William Holland a geopolitical analyst & North American recruiter for Wikistrat, specializing in monitoring the nuclear posture of the Indian-Pakistani rivalry.

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