Saturday, September 20, 2008

A Case of Misplaced American Investment Priorities?

19th century domestic investment and consumption strategy turned on its head

Finance set the terms of corporate behavior over the past quarter-century, and not in ways that bolstered the economy. By its actions - elevating shareholder value over the interests of other corporate stakeholders, focusing on short-term investments rather than patient capital, pressuring corporations to offshore jobs and cut wages and benefits - Wall Street plainly preferred to fund production abroad and consumption at home. The internal investment strategy of 100 years ago was turned on its head. Where Morgan once funneled European capital into American production, for the past decade Morgan's successors have directed Asian capital into devices to enable Americans to take on more debt to buy Asian products.

Salt Lake Tribune
Wall Street's investment banks deserve to die
September 19, 2008


Thought-provocative editorial piece in Thursday's Salt Lake Tribune, wherein the author, Harold Meyerson, contrasts the American financial community's (and the government's) domestic investment priorities during the late 18th and early 19th centuries, with the decidedly non-domestic investment preferences of the late 20th century.

It's an interesting article... well worth a look.

2 comments:

Curmudgeon said...

Comment moved to main article

JOHN SPENCER said...

>>>Where Morgan once funneled European capital into American production, for the past decade Morgan's successors have directed Asian capital into devices to enable Americans to take on more debt to buy Asian products.<<<

That's the whole problem. Why else would China still be buying up our T-Bills?

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