phantom-thought

The orthodox story blames declining profitability (and price inflation) during the ’70s on the excessive demands of labor—a plausible enough explanation until you consider that the worldwide defeat of labor since the ’80s has failed to restore prior levels of growth. The high wages of the early ’70s are long gone. What has endured and intensified since then is a systemic bias in favor of short-term financial speculation over longer-term productive investment.

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A bubble occurs not when people pay for real estate with money they don’t yet have—as always happens, given the availabilty of credit—but when they pay with money they will never have, out of wages they will never receive—out of wages no one will ever receive.