Daily Archives: June 22, 2016

Why Young Americans Are Giving Up on Capitalism

By Sarah Kendzior – Imagine that you’re twenty years old. You were born in 1996. You were five years old on 9/11. For as long as you can remember, the United States has been at war.

When you are twelve, in 2008, the global economy collapses. After years of bluster and bravado from President George W. Bush — who encouraged consumerism as a response to terror — it seems your country was weaker than you thought.

In America, the bottom falls out fast.

Baby boomers tell you there is a way out: a college education has always been the key to a good job. But that doesn’t seem to happen anymore. The college graduates you know are drowning in student debt, working for minimum wage, or toiling in unpaid internships.

Every now and then, people revolt. When you are fifteen, Occupy Wall Street captivates the nation’s attention, drawing attention to corporate greed and lost opportunity. Within a year, the movement fades, and its members do things like set up “boutique activist consultancies.”

In 2016, pundits declare your hardship an aberration: unemployment is a low 4.7 percent! At first you think it’s a mistake, until you realize the government counts everyone working part-time or gig jobs or making salaries below the poverty line as “employed.”

That is what employment looks like in America. It is not personal fulfillment or a path to a future. It is futility — and it is forever.

Survival is the new American Dream.

Is it any wonder over half of 18- to 29-year-olds in America say they do not support capitalism? more> https://goo.gl/DXAw7w

Related>

Thank the Financial Crisis for Today’s Partisan Politics

BOOK REVIEW

The Age of Austerity, Author: Thomas Byrne Edsall.
Manias, Panics, and Crashes: A History of Financial Crises, Author: Charles P. Kindleberger.
House of Debt: How They (and You) Caused the Great Recession, and How We Can Prevent It from Happening Again, Authors: Atif Mian and Amir Sufi.

By Amir Sufi – While political polarization has been all-American since the start of the US, its current upswing threatens to make it the worst in history. Sharp divisions between Republicans and Democrats have created gridlock in Washington, DC, between the president and Congress and within Congress itself.

In the US, decisions made during the 2007–10 financial crisis to rescue Wall Street fueled public anger that still resonates with voters of both parties.

The aftermath of the crisis—which included erasure of trillions of dollars of housing wealth and continued income stagnation for the working and middle classes while the wealthy benefited from rising asset prices—has provided fertile ground for even more partisanship and polarization.

Financial crises tend to radicalize electorates.

After a banking, currency, or debt crisis, our data indicate, the share of centrists or moderates in a country went down, while the share of left- or right-wing radicals went up in most cases.

Every banking crisis is associated with excessive lending. As the bubble develops, borrowers who are less and less creditworthy take on more and more debt.

Big mortgage lenders, including Wachovia, Washington Mutual, and Countrywide Financial, were bought by other large banks whose liquidity was essentially guaranteed by the US Treasury or the Federal Reserve. Even two big investment banks, Goldman Sachs and Morgan Stanley, were quickly converted into commercial banks so they could be “rescued” by the Treasury and the Fed.

Distressed homeowners got little relief from TARP [2] or from subsequent legislation and settlements with big banks. more> http://goo.gl/ZTFJ2u

Rethinking Digital: Three Steps To Take Advantage Of The Rise Of E-Commerce

By Jeff Messer – Feeling paralyzed by the rise of e-commerce?

You’re not alone. Even the most sophisticated branded manufacturers struggle to find the best e-commerce balance for their companies.

To stay competitive and avoid being left behind, your digital approach likely needs an overhaul. Here are three strategies for generating sales at different customer touch points — and growing your online revenue.

  1. Bridge The Gap Between Research And Purchase
    Make your e-commerce partners a priority, not an afterthought. Your retail partners set the tone for your customer experience. Implementing a “where to buy” solution gives you the ability to connect shoppers directly to your retailers, so they don’t have to search the Internet themselves for the product they want to purchase.
  2. Show In-Store Options
    Enable consumers to see product-specific, in-store selection in certain geographic areas to drive foot traffic to your retailers’ brick-and-mortar stores.
  3. Sell Directly To Consumers
    Think about your technical ability to sell products, as well as your resources for marketing those products to consumers. Start small if necessary, but consider the long-term benefits you want to see.

The options for increasing your online sales are widening. It can be a headache, but executing an effective e-commerce strategy can ultimately increase your profitability. more> http://goo.gl/tkmnHo

Market Capitalism is Broken

BOOK REVIEW

Makers and Takers: The Rise of Finance and The Fall of American Business, Author: Rana Foroohar.

By John Battelle – The capital markets and Wall Street are no longer serving business or the Main Street economy that you and I live in.

If you think about it, capitalism as defined by Adam Smith was a system by which the capital markets would take the deposits that you and I put in the bank, and invest it in real businesses that create real jobs and growth.

But only 15 percent of all the money flowing through financial institutions today ends up in businesses. The rest of it is staying within the closed loop of the market itself. It’s being traded.

A lot of that money is going into the real estate market. Some of it is going to average people like you and me for mortgage loans, but the real money is in securitizing those loans.

The other part of it is the securities market. The securities market is stocks, bonds, collateralized debt obligations and so on. They’re all the things on paper that the financial system trades in a closed loop.

You’ve gotten 40 years of policy decisions that have encouraged that, that have protected this industry, and that’s one reason why this industry creates 4 percent of jobs and takes 25 percent of the corporate profit pie. more> http://goo.gl/DUHcXx

Related>