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Wed May 11, 2016, 10:29 AM May 2016

Even a Time Finance Columnist Is Now Questioning American Capitalism

(In These Times) Casual browsers might mistake Rana Foroohar’s Makers and Takers for a Tea Party manifesto. The phrase is most famously identified with House Speaker Paul Ryan, who warned in 2010 that “takers”—i.e., people who receive more in federal benefits than they pay in taxes—were poised to become the majority of Americans, eclipsing the “makers”—the business owners and financiers who create hardy economic value.

But Foroohar, an economics columnist for Time and analyst for CNN, inverts Ryan’s callow sloganeering to devastating effect. Makers and Takers is a closely argued, richly reported anatomy of the sluggish, unequal and crisis-prone state of the U.S. economy under the dictates of financialization—the tax giveaways, financial-sector deregulation, securitized debt, etc., that are celebrated by figures such as Ryan.

Take, for example, the fanciful pretext for Ryan’s remarks: the well-worn lament that to even slightly increase regulations is to browbeat would-be job creators into a state of paralysis. In truth, Foroohar notes, “there isn’t a shred of evidence to suggest that lowering taxes on the rich makes them any more or less likely to invest or start businesses.”

Indeed, citing a 2015 report from the Office of Financial Research, Foroohar notes that since the great crucible of the 2008 meltdown, corporate earnings “are rising” even as “sales growth for most public U.S. companies is not.” Astonishingly, as Democrats and Republicans alike have nonsensically preached austerity to the nation at large, the investor class—the real layabout “takers”—has sunk into an ocean of red ink, with corporate debt ballooning from $5.7 trillion in 2006 to $7.4 trillion today. Most of this dosh is repackaged into exotic new financial instruments designed to maximize short-term shareholder returns. In the 1970s, American companies invested more than 15 times what they paid out to shareholders; now that ratio is below 2 to 1. ...................(more)


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