Stock market bubble no basis for shared prosperity

By Jomo Kwame Sundaram

“The US is currently still in a stock market bubble which, if history is any guide, is likely to end, perhaps soon due to Covid19. President Trump would, of course, like to sustain it to strengthen his November re-election prospects.

Meanwhile, US business investment has declined for many years. As shares of GDP (gross domestic product), corporate profits or even market capitalisation, such investment has been in decline for at least four decades. Clearly, ‘neo-liberal’ economic policies have failed to decades-long trend.

FINANCIALISATION ‘UNREAL’: Although focused on the US, William Lazonick’s seminal 2014 Harvard Business Review article, Profits without Prosperity, and Lazonick and Shin’s new book, Predatory Value Extraction: How the Looting of the Business Corporation Became the US Norm and How Sustainable Prosperity Can Be Restored offer invaluable insights into investment trends with implications for much of the world.”…

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