The Neoliberal Looting of America
nytimes.com
nytimes.com
LBOs do not always lead to corporate raiding or asset stripping, in the same way that the restructuring and rationalisation that follow an LBO does not always result in mass redundancies. Theoretically, LBOs allow a company to avoid the pressure of the quarterly reporting cycle for a while and make more long-term decisions without facing instant 'repercussions'.
If you're interested in how LBOs got the reputation they got, and a case study in the biggest and most notorious LBO, try 'Barbarians at the Gate', which follows the LBO of RJR Nabisco.
Capitalism is a system of profit and loss, but if you don’t have to worry about the losses, then the incentive to do your due diligence on risky bets is also lost because you’re effectively playing with taxpayer money instead of your own. The real story is that we bought into too big to fail and that was a mistake.
If the recent KY primary is any indication, the corrupt authorities are going to fight very hard to avoid that moment, and reform will not occur bureaucratically.
The majority of them are benefiting handsomely from the stock market.
So it is in their best interest to keep the status quo, and keep the game going.
The author explicitly addresses this point when he argues that the free-market deregulation led to industry consolidation which led to the very policy environment you're critizing.
Capitalism isn't a system of profit and loss, it's whatever capitalists make of it and if you hand them enough power they'll eliminate the loss.
This is pretty much the very obvious insight of the last few decades. The system of deregulation and neoliberalism is contradictory because it destroys the tools it depends on, akin to how the laissez-faire attitude on speech which was supposed to strengthen democracy has in fact led to mass abuse, foreign interference and a general suspicion of free expression.
What the people like Hayek didn't get (probably because they were too busy complaining about socialism all day long), is that their system is fundamentally contradictory if left to its own devices and that functioning markets are socially constructed, and rely on being nurtured and maintained by principles that aren't found in the markets themselves.
A good regulatory regime is one that sets the rules and stays out of the game except to enforce those rules. If a company will go bankrupt, fine, the people that took a chance and invested in it lose their money, but that’s how markets function.
i think, to some extent, with the accumulation and employment of captial (the point of "capitalism"), its intuitive to surmise that employment of capital also entails co-opting governments for their own benefit to further improve the ability to accumulate and employ more capital (get the govt to bail you out, rewrite the rules of finance etc)
so, maybe saying just "this isnt capitalsim" isnt going far enough, maybe instead it is the result of capitalism
Plus soak the rich that neoliberalism helped create. Article didn't address this, but tenants of neoliberalism like free trade are helpful for peaceful negotiations among countries and global cooperation