Saturday, December 09, 2023

The end of American capitalism? No, a benefit for big business.

Nothing would delight us more than a guarantee that in 2024 a global understanding of socialism and the need to replace capitalism before it does even further to the world and everyone who lives in it.

But the eyebrow raising headline ‘the end of U.S. capitalism’ posed more questions than it answered. A seconds reflection caused the immediate question to spring to mind, welcome as that would be what was envisaged to take it’s place? Was the replacement likely to be a form of state capitalism or the imposition of a Orwellian regime? A little further reading provided the elucidation.

Saxo is a Danish investment bank. Apparently they like to make ‘outrageous’ predictions as to what events might occur in the coming twelve months.

American news outlet, CNBC (formerly Consumer News and Business Channel) reports on their results for 2024 from gazing into the crystal ball.

One of their predictions was that the European Union, apparently strapped for cash – when are governments whose main concern is in looking after the interests of capitalists in its particular domain not strapped for cash? - wars are expensive things- might implement a two per cent wealth tax on billionaires. Saxo sagely notes that,’ this would be rendered more likely if the population “realises how little in tax billionaires are actually paying’.

The item in question read: ‘In order to avoid social unrest, Congress may be forced to increase fiscal spending, sending the budget deficit above 10% of GDP and meaning the government must foster demand for U.S. Treasurys urgently.

The attention goes to the stock market, where the ‘Magnificent Seven’ have now become twelve, thanks to a missed downturn and government support programs directed to lenders and homeowners,’ Saxo said. ‘The group currently comprises Apple, Amazon, Alphabet, Meta, Microsoft, Nvidia and Tesla.’

To join the club are Eli Lilly, Novo Nordisk, JPMorgan Chase, LVMH and ASML. As the ‘Twelve Titans’ multiplies their valuations within a few months, inequality increases between investors and non-investors.” This dramatic move marks the end of capitalism, as money rotates from private corporations to the public, and holding riskier assets becomes more expensive. Counterintuitively, the ‘Twelve Titans’ consolidate their market dominance, as they benefit from long-term lower cost of funding, while the rest of the stock market collapses.”’

So big business benefits at the expense of everyone else. The more things change etc.

What’s outrageous is the continuing existence of a social system which exploits the vast majority for the benefit of a small minority.

What’s your New Year’s resolution going to be?

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