"The Flaw"

matthew's picture

Just watched "The Flaw". It's an entertaining and surprisingly unbiased documentary covering the myriad causes of the 2008 financial disaster from which the world is still recovering.

The most startling realization of the film for me is that from 1977 to 2007 the American people collectively engaged in the largest redistribution of wealth in world history, transferring money from the poorest 65% to the top 1%, from people who would spend the money to those who tend to invest the money rather than spend it. And we did all of this VOLUNTARILY through debt.

The second most startling realization is that we are still doing this. And it's accelerating. The poorest among us are once again making the richest richer, and the richest are once again investing in more debt-based money-generating vehicles based on asset bubbles rather than investing in things that have worth due to their utility. All because, ultimately, exploitative debt-based real estate securities generate far more short-term profits than investing in factories and technologies that make real, tangible stuff.

Enjoy the respite from the housing bubble, folks. It's still ongoing, and we're still pumping twenty billion dollars a month into trying to keep the illusion of wealth growth through home appreciation for the middle-class rather than real, tangible wage increases and innovation with production.