File Name: makers and takers rana foroohar .zip
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- Makers and Takers: The Rise of Finance and the Fall of American Business
- Rana Foroohar
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Foroohar argues that finance has become an increasingly powerful part of the U. I stopped listening to this after about 20 minutes but not before Foroohar had name-checked virtually every progressive fallacy about the economy and financial markets that exists.
I can only assume that Russ chose to have her on to diversify his usually offering of thoughtful and economically informed analysis with some pop-culture progressivism. Unlike Foroohar, however, I put the blame for this squarely where it belongs. The financialization of the economy is largely the result of crony capitalism and bad monetary and fiscal policies.
Rana Foroohar: Yeah, it is true. No—I actually document it in the book. Foroohar is convinced that her position, an aggregation of the work of others, is absolutely correct. There does not seem to be much room for gray in her world. Because, he asserts, business is still obsessed with paper standards that were valuable in the old days of scarcity, but have been obsoleted by technical advance.
Please consult our comment policies and check your email for explanation. For most companies, these opposing forces usually results in capital allocation decisions that represent a compromise of what each side would choose absent the other. However, unlike this author, I admit that my views are just my own and are not irrefutable no matter how many times I happen to footnote them. Share repurchases are low-risk and near term and can be more tax efficient.
That kind of cash flow is worth more in a discounted cash flow than higher risk, longer term payback investment projects. Second years grow cynical and harshly criticize the works instead. But third years find the strains of truth in the text, tempering critique with appreciation for the more persuasive ideas in a text.
And fourth years, burnt out and ready to leave, bang out whatever comes to mind the night before the due date. And of course, he provides piercing critique when appropriate. Yet I also often feel slightly let down after listening, as though the conversation were on the verge of profundity before veering away.
The guest, whom I cannot hold to such high standards, remained unquestioningly steadfast in her views. Yet Russ also refused to engage with her case productively. But this is different than cursory dismissal. I feel that putting himself into a charitably inquisitive position would have been far more educational for listeners. In future EconTalks, I hope to see a progression into a deeper synthesis of conflicting views and better openness to guests. It may be true that announcements of investment projects are more likely to lead to a decline in stock prices than share buy-backs.
The discussion on share buybacks demonstrated Ms. As Russ pointed out, Apple is not producing new and innovative products anymore.
The market knows this and the owners of Apple stock want a stable cash cow. If they wanted innovation and risk they would invest in a basket of startups. The unintended consequence would be to starve newer, more innovative companies of capital.
Welcome to EconTalk. As for the consumer, I do think that they changed the tax code so that people that defaulted did NOT have to pay any tax on that debt forgiveness, something that made walking away easy for a lot of people. Truly non-scientific. Boeing designs airplanes with a hope that they will break even in twenty years, and make money after that.
Oil companies explore with a view to profits often even further out. The only simple explanation I can make is that she has an emotional attachment to the welfare state and a rational attachment to capitalism and is going through all kinds of rationalizations to make the latter logically imply the former. And you look at how their innovation starts to tail off after they go to the public markets. That is very clearly not how things work. Exactly how it does work is not obvious.
But what we do know is that most companies have either zero or one great idea brilliantly executed in their entire lifespan. And for a large majority of new companies, they have that one single idea before IPO, simply because that idea was what allowed them to grow to make an IPO in the first place.
It is thus true that the rate of great innovations perfectly executed drop after IPO. But to blame this on the stock market is simply ignorant. What is the control group here? Can anyone name even three examples, let alone a single one?
Take this example from in the line of fire, when John Malcovich, playing the would-be assassin in disguise as a software CEO, is fully in character:. The Japanese see the depth. We plan the next fiscal quarter. They plan the next quarter century. I was looking forward to this podcast as I was hoping it would address the growth of the financial sector at the expense of other sectors coming as a result of regulatory and monetary decisions.
From the Amazon summary this may be addressed in her book. Unfortunately this does not ensure an adequate outcome, as the debate moves on to a myriad of implementation issues which have plenty of room for push back — eg who is defined as systemically important, how big are the buffers and how do they vary between banks?
Mortgage Deduction — Seen elsewhere on the internet, does homeowner tax breaks cause homelessness? I think that this might possibly have touched in passing on the question that I would have found most interesting: Has an arms race between financial companies soaked up engineering and quant talent that would be better used e.
The rest of it is basically about the buying and selling of existing assets, which brews bubbles, which creates instability in the system. If the activity is so useless, why is the rest of the economy prepared to pay the financial sector so much for this activity? There are a large number of stock investors looking for mispricings by the market. Email the webmaster econlib.
A valid email address is required to post comments on EconLog and EconTalk. Oy vey. It took some effort, but I was able to listen to the entire podcast. I can also say that as both an undergraduate business major with a MBA, I have a pretty good view on what gets taught in those programs.
I have all sorts of issues with the merits of a business education, but thinking that business schools focus primarily on financial engineering is ridiculous. Overall, she like an English major with very little understanding of economics or the second order impact of what she was recommending. RF used many cherry picked examples, did not look at obvious counterfactuals, and generally toed the anti-corporate line. BUT, what I may have heard later on was a small spark of a self described liberal coming to an understanding of some fundamental conservative principles.
Granted, it is a long way from thinking that Piketty is a valid name to drop to becoming a free market believer, but I think that there is definite hope for our guest. The denominator goes down and the share price goes up. And the Fed has kept interest rates and thus borrowing costs at historic lows.
These are all just more perverse incentives due to government regulations, of which Dodd Frank is a superb example, almost eliminating ANY new bank start ups since its creation and institutionalizing instead of addressing too big to fail.
Nevertheless, I still hold out hope that once RF does some even deeper research, she will see the light. I only made it thru this entire podcast because I was trapped in a car with no other alternatives. After the well-footnoted remark I preferred silence for a while but then when back to it. She seemed to brighten up. Addendum — with respect to stock buybacks, these only work in favor of the current stockholder if they can successfully time the market. The buyback, whether via accumulated earnings or debt, can be quickly wiped out by a negative market event, leaving less cash or a lot of debt as the only thing to show for the financial maneuver.
A buy and hold investor would end up with only a temporary inflation of the stock price. Count me more sympathetic to RF, that markets are mostly a casino, and the management is taking not just one green zero from the roulette wheel Europe or two as in the States, but five or six green zeros. But attendance at the casino is compulsory directly or indirectly. Short term financial engineering has been common in our medical field and almost always a longer term disaster.
Practice buyouts for example. Beyond the fraud in the crash, I would like to see a discussion of the fraud-ish fractional reserve system and more details on alternatives for bank ownership. There is no reasonable defense for subsidized securitization of loans. On the biophysical economics side, it will be interesting to see how the Wall Street-Oil Fracking dance ends. So far no profits and only financial engineering, trillions in debt.
But I might not be spending the winter in south Florida without the generous subsidy. Thanks for that.
Is that a train wreck on the horizon? Define long term. This is the only EconTalk in 10 years that I have not been able to get through 15 minutes of. I turned it off at the grain in the red cup taken by speculators. There are important issues for analysis and discussion on some of these topics — e. But there has also been an increase in the amount of real activities and roles that previously finance-only entities now play in the economy — good, bad, what are the consequences?
Also, e. The discussion with this author gets at none of this in either an insightful or understandable way. The need to adopt such ideas must be intrinsic to human nature. Karl Marx put forth many notions akin to the makers i. This author just seems steeped in the current status quo version of those.
Winner of the Porchlight Business Book of the Year for And yet that quaint slogan—which has since been quietly but deliberately abandoned by Google leadership—reminds us that giants like Google, Facebook, Amazon, and Apple weren't always the cash-printing corporate leviathans they have become today. In fact, they were born out of a starry-eyed vision for a utopian future in which technology would inevitably make the world better, safer, and more prosperous, one in which the internet would be a grand connective force, uniting us in one global village while leveling the playing field for all. How long ago that all seems. This books shows us how. It is a must read.
Every so often a book comes along that works its way into a majority of the interesting conversations you have with both friends and colleagues. Foroohar was kind enough to send me an early draft to read several months ago, and I found myself quoting from it in nearly everything I subsequently wrote, in every talk I gave, and even in various Slack channels at work. Foroohar chronicles the rise of the financial industry and its destructive impact on the global economy. My elevator pitch? We all know something is deeply broken in our economy.
Eight years on from the biggest market meltdown since the Great Depression, the key lessons of the crisis of still remain unlearned—and our financial system is just as vulnerable as ever. Many of us know that our government failed to fix the banking system after the subprime mortgage crisis. Consider that:. Exploring these forces, which have have led American businesses to favor balancing-sheet engineering over the actual kind and the pursuit of short-term corporate profits over job creation, Foroohar shows how financialization has so gravely harmed our society, and why reversing this trend is of grave importance to us all. Google Drive:. Certainly price bookmarking for revisiting.
My last book, Makers and Takers, came out of high-level policy conversations about the financial industry. This book, which examines the economic, political.
Makers and Takers: The Rise of Finance and the Fall of American Business
A brilliant book, diving into the shift from our focus on business before WWII to finance post WWII , the difference between the two, and our need to reorient back to a focus on business not what It is quite obvious that there is something fundamentally wrong with our economic system, a system in which the CEO of a corporation is paid several hundred times the wage of its average worker. Rana Foroohar. Many of us know that our government failed to fix the banking system after the subprime mortgage crisis.
Look Inside. May 17, Minutes Buy. This is a belief held equally on both sides of political spectrum, and it seems only to be gaining momentum. A key reason, says Financial Times columnist Rana Foroohar, is the fact that Wall Street is no longer supporting Main Street businesses that create the jobs for the middle and working class.
Has Makers and Takers by Rana Foroohar been sitting on your reading list? Pick up the key ideas in the book with this quick summary. On 29 October , the financial markets crashed, thousands of small and large investors lost their savings and mass unemployment ensued.
Finance holds a disproportionate amount of power in sheer economic terms. It represents about 7 percent of our economy but takes around 25 percent of all corporate profits, while creating only 4 percent of all job s. But its power to shape the thinking and the mind-set of government officials, regulators, CEOs, and even many consumers who are, of course, brought into the status quo market system via their k plans is even more important.
In Review: Makers and Takers Book Summary
Foroohar argues that finance has become an increasingly powerful part of the U. I stopped listening to this after about 20 minutes but not before Foroohar had name-checked virtually every progressive fallacy about the economy and financial markets that exists. I can only assume that Russ chose to have her on to diversify his usually offering of thoughtful and economically informed analysis with some pop-culture progressivism. Unlike Foroohar, however, I put the blame for this squarely where it belongs. The financialization of the economy is largely the result of crony capitalism and bad monetary and fiscal policies. Rana Foroohar: Yeah, it is true. No—I actually document it in the book.
Чего вы от меня хотите. Беккер задумался: Я бы хотел, чтобы ты как следует вымыл голову, научился говорить по-человечески и нашел себе работу. Но решил, что хочет от этого парня слишком многого. - Мне нужна кое-какая информация, - сказал. - Проваливал бы ты отсюда. - Я ищу одного человека.
Зато был другой голос, тот, что звал. Кто-то рядом с ним попытался его приподнять. Он потянулся к голосу. Или это его подвинули. Голос все звал его, а он безучастно смотрел на светящуюся картинку.
Стратмор разработал план… и план этот Фонтейн не имел ни малейшего намерения срывать. ГЛАВА 75 Пальцы Стратмора время от времени касались беретты, лежавшей у него на коленях. При мысли о том, что Хейл позволил себе прикоснуться к Сьюзан, кровь закипела в его жилах, но он помнил, что должен сохранять ясную голову, Стратмор с горечью признал, что сам отчасти виноват в случившемся: ведь именно он направил Сьюзан в Третий узел.
Пуля ударила в закрывающуюся дверь. Пустое пространство зала аэропорта открылось перед Беккером подобно бескрайней пустыне. Ноги несли его с такой быстротой, на какую, казалось ему, он не был способен. Когда он влетел во вращающуюся дверь, прозвучал еще один выстрел. Стеклянная панель обдала его дождем осколков.
Hola? - крикнул он, приоткрыв дверь. - Con permiso. Не дождавшись ответа, он вошел. Типичная для Испании туалетная комната: квадратная форма, белый кафель, с потолка свисает единственная лампочка.
Поэтому от Хейла не потребовалось вообще никаких усилий: личные коды соответствовали первым пяти ударам по клавиатуре.