Duménil and Lévy and the Apotheosis of Capital

Graph below from Duménil and Lévy's (D&L) The Crisis of Neoliberalism (p. 61) [my previous post on their book here].

Note that contrary to the Fed's base rate, which is negative in real terms, the rates paid by corporations are relatively high. Note that firms my borrow to finance, not production, but to buy back stock and pay dividends, and enrich stockholders, including management. That's what happened according to D&L (see below, p. 62).

In other words, on average higher rates of interest (even if lower in periods of financial crises) sustain redistribution towards fat cats. The opposite of Keynes' euthanasia of the rentier indeed.

Growing Indebtedness

I have posted here on growing indebtedness and financialization. The table below comes from Duménil and Lévy's recent book The Crisis of Neoliberalism.

As they note (p. 104) in regard to the table, one can see: "the rise of the debts of all US sectors as a percentage of GDP. This growth remained moderate after World War II, from 126 percent in 1952 to 155 percent in 1980, and exploded during the neoliberal decades, up to 353 percent in 2008." Yet, between 1952 and 1980 public sector debt fell from 68 to 37, and the moderate increase was all in private debt. Further, note the explosion of the financial sector debt increasing six-fold in the three decades after 1980. Over the whole period, the financial sector debt as a share of GDP grew by almost 40 times. In their words again: "the indebtedness of the financial sector is a new and spectacular phenomenon, typical of the neoliberal decades."