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I think this comment is a little bit reductive and conspiratorial, even if it gets first-order correlations correct. You don’t need a conspiracy, you just need

I think this comment is a little bit reductive and conspiratorial, even if it gets first-order correlations correct. You don’t need a conspiracy, you just need a philosophy of small government and low regulation to let grifts expand through the financial parts of the economy. The history of financial regulation in the US is the banking industry finding new ways to evade regulation, which lead to moral hazards and privatized gains / socialized losses. But it’s not that the “system” is explicitly designed that way; instead, it’s an adversarial system and the US in particular (for cultural reasons) has long favored the vigilante over the regulator. The story works even without simple Hollywood villains. The system isn’t malicious, it’s just stupid. Which is a long way of mostly agreeing with you. (Oh, except on printing money. That’s a surprisingly deep subject that’s often misunderstood. You’re spot on about government-sponsored wealth redistribution, though. Fully on board with that.)

atwrk 2y ago
To add to this point: We can look to China to see that the financialization of the economy, like it happened in the US, is not a natural law but can instead be restricted. China has explicitly said that they see the development of financial markets in the US as a problem for the US economy they decidedly aim to avoid. Stories like what happened to Jack Ma have to be interpreted in that context, I think. In my reading that wasn't about politics at all, but about an unregulated peer to peer lending product (i.e. a tech based loan shark system for exploiting people in need) he was about to release.
- grumpy-de-sre 2y ago
  People like to forget China was aggressively combating financialization [1] long before Jack Ma was forced to step down. Ant financials ambitions were an absolute disaster in the making [2]. I still remember my wife casually mentioning, back in 2019 or something (well before Evergrande), that China was restricting property speculation. Prohibiting folks from taking out loans on third properties etc. As an Australian this was mind blowing to me, property speculation is a sacred religion there. I far from agree with their politics on social matters, but their financial regulators aren't asleep at the wheel and haven't been regulatory captured. 1. https://en.wikipedia.org/wiki/Three_red_lines https://en.wikipedia.org/wiki/Three_red_lines 2. https://www.forbes.com/sites/georgecalhoun/2020/11/16/why-china-stopped-the-ant-groups-ipopart-2-ants-dangerous-business-model/ https://www.forbes.com/sites/georgecalhoun/2020/11/16/why-ch...
  - greyw 2y ago
    Most chinese are storing wealth in real estate its the prime investment vehicle. People in china have been speculating on properties for decades. The chinese government realized a bubble was forming because house builders started using crazy leverage. The fact this crazy bubble formed has shown the regulators were in fact asleep.
    - grumpy-de-sre 2y ago
      Three red lines was definitely reactionary and perhaps late, but better late than never. I'd consider any form of intervention/deleveraging prior to a full blown meltdown evidence of being "not asleep". It's very hard to pass laws that negatively impact peoples life savings.
    - maxglute 2y ago
      Regulators caught on since early 2010s, they were just soft because hard messing with wealth. Before 3RL, RE bubble was being addressed since 2010s, TLDR is policies led to domestic construction slump in 2012-2017 - where indicators like floor space completion and construction employment peaked. ~2017 crack down on shadow banking which drove developers + local gov to increase presales, turning it into a financial instrument to keep the taps going. Then hard 3RL in 2020. Could have probably smashed skulls harder, sooner, but they've been regulating for 10+ years, developers kept finding loopholes thinking central gov would be soft, until central gov wasn't. See: https://www.ceicdata.com/datapage/charts/o_china_cn-floor-space-completed/?type=area&from=2006-12-01&to=2017-12-01&lang=en https://www.ceicdata.com/datapage/charts/o_china_cn-floor-sp... At minimum getting floor space completion to peak in 2014 = mitigated bubble. E: IMO also important to note 3RL happened AFTER 12TH & 13th 5YR PLAN that build out PRC renewable manufacturing. Reason why 3RL is feasible was it became possible to shift construction to renewable rollout to keep jobs and gdp, minus RE speculation, i.e. why PRC can grow at ~5% instead of 5% + 3% RE speculation. RE was never 30% economy, about 15% + 15% in construction and downstream industries. The 15% RE growth got cut down, but other 15% shifted to growing renewable infra.
      - grumpy-de-sre 2y ago

atwrk 2y ago

To add to this point: We can look to China to see that the financialization of the economy, like it happened in the US, is not a natural law but can instead be restricted. China has explicitly said that they see the development of financial markets in the US as a problem for the US economy they decidedly aim to avoid. Stories like what happened to Jack Ma have to be interpreted in that context, I think. In my reading that wasn't about politics at all, but about an unregulated peer to peer lending product (i.e. a tech based loan shark system for exploiting people in need) he was about to release.

grumpy-de-sre 2y ago
People like to forget China was aggressively combating financialization [1] long before Jack Ma was forced to step down. Ant financials ambitions were an absolute disaster in the making [2]. I still remember my wife casually mentioning, back in 2019 or something (well before Evergrande), that China was restricting property speculation. Prohibiting folks from taking out loans on third properties etc. As an Australian this was mind blowing to me, property speculation is a sacred religion there. I far from agree with their politics on social matters, but their financial regulators aren't asleep at the wheel and haven't been regulatory captured. 1. https://en.wikipedia.org/wiki/Three_red_lines https://en.wikipedia.org/wiki/Three_red_lines 2. https://www.forbes.com/sites/georgecalhoun/2020/11/16/why-china-stopped-the-ant-groups-ipopart-2-ants-dangerous-business-model/ https://www.forbes.com/sites/georgecalhoun/2020/11/16/why-ch...
- greyw 2y ago
  Most chinese are storing wealth in real estate its the prime investment vehicle. People in china have been speculating on properties for decades. The chinese government realized a bubble was forming because house builders started using crazy leverage. The fact this crazy bubble formed has shown the regulators were in fact asleep.
  - grumpy-de-sre 2y ago
    Three red lines was definitely reactionary and perhaps late, but better late than never. I'd consider any form of intervention/deleveraging prior to a full blown meltdown evidence of being "not asleep". It's very hard to pass laws that negatively impact peoples life savings.
  - maxglute 2y ago
    Regulators caught on since early 2010s, they were just soft because hard messing with wealth. Before 3RL, RE bubble was being addressed since 2010s, TLDR is policies led to domestic construction slump in 2012-2017 - where indicators like floor space completion and construction employment peaked. ~2017 crack down on shadow banking which drove developers + local gov to increase presales, turning it into a financial instrument to keep the taps going. Then hard 3RL in 2020. Could have probably smashed skulls harder, sooner, but they've been regulating for 10+ years, developers kept finding loopholes thinking central gov would be soft, until central gov wasn't. See: https://www.ceicdata.com/datapage/charts/o_china_cn-floor-space-completed/?type=area&from=2006-12-01&to=2017-12-01&lang=en https://www.ceicdata.com/datapage/charts/o_china_cn-floor-sp... At minimum getting floor space completion to peak in 2014 = mitigated bubble. E: IMO also important to note 3RL happened AFTER 12TH & 13th 5YR PLAN that build out PRC renewable manufacturing. Reason why 3RL is feasible was it became possible to shift construction to renewable rollout to keep jobs and gdp, minus RE speculation, i.e. why PRC can grow at ~5% instead of 5% + 3% RE speculation. RE was never 30% economy, about 15% + 15% in construction and downstream industries. The 15% RE growth got cut down, but other 15% shifted to growing renewable infra.
    - grumpy-de-sre 2y ago