As banking continues to financialize the economies of the world, we will see more and more evidence of how the power that financializtion brings will be revealed; for example, when finance becomes the major player in the economy, then everything has a “bottom line” and profits will be the key motivation and all other economic activity, especially public activity, will take second place.
When we know the rules of finance (Profit at all Cost), then we can better understand why other things, like public art become less important. Agriculture and manufacturing become secondary also. All Value is reduced “either into a financial instrument or a derivative of a financial instrument.”
“Workers, through a financial instrument such as a mortgage, could trade their promise of future work/wages for a home. Financialization of risk-sharing makes all insurance possible, the financialization of the U.S. Government‘s promises (bonds) makes all deficit spending possible. Financialization also makes economic rents possible.” (Wikipedia). . . .
Michael Hudson described financialization as “a lapse back into the pre-industrial usury and rent economy of European feudalism” in a 2003 interview:
“only debts grew exponentially, year after year, and they do so inexorably, even when–indeed, especially when–the economy slows down and its companies and people fall below break-even levels. As their debts grow, they siphon off the economic surplus for debt service (…) The problem is that the financial sector’s receipts are not turned into fixed capital formation to increase output. They build up increasingly on the opposite side of the balance sheet, as new loans, that is, debts and new claims on society’s output and income.
[Companies] are not able to invest in new physical capital equipment or buildings because they are obliged to use their operating revenue to pay their bankers and bondholders, as well as junk-bond holders. This is what I mean when I say that the economy is becoming financialized. Its aim is not to provide tangible capital formation or rising living standards, but to generate interest, financial fees for underwriting mergers and acquisitions, and capital gains that accrue mainly to insiders, headed by upper management and large financial institutions. The upshot is that the traditional business cycle has been overshadowed by a secular increase in debt. Instead of labor earning more, hourly earnings have declined in real terms. There has been a drop in net disposable income after paying taxes and withholding “forced saving” for social Security and medical insurance, pension-fund contributions and–most serious of all–debt service on credit cards, bank loans, mortgage loans, student loans, auto loans, home insurance premiums, life insurance, private medical insurance and other FIRE-sector charges. … This diverts spending away from goods and services. (Wikipedia)
We can see the effects that financialiation has on citizens as unemployent increases, wages and salaries decrease or stagnate and, finally, the rise of things like “factory banking” which is described below. There will be more financial crises and disasters to come.
The increase will add about €100 a year to the cost of health insurance for the average family.
The company said yesterday it was putting up its prices because it needed to price policies “in order to ensure that we can continue to cover the healthcare needs of our customers”.
It blamed the latest price rise on the fact that people were living longer with long-term illnesses. This was contributing to increased demand and use of health services, a spokesman said.
The cost of claims for private hospitals has gone down but public hospital costs continue to rise, according to the insurer.
The increase will take effect from November 22nd. With 57 per cent of the market, VHI is the largest health insurer and has 1.3 million customers.
Last March it increased prices by between 6 per cent and 12.5 per cent, on top of a 1.9 per cent rise last November.
Other insurers have also increased their prices this year. Aviva premiums went up by up to 7 per cent for policy renewals from last week, the fifth increase in less than two years. Laya Healthcare, formerly Quinn Healthcare, has had two price rises this year.
The insurance companies met Department of Health officials last Friday over the department’s plans to modify risk equalisation rules to make insurance more expensive for treatment in private hospitals.
Irish Life posts €96m in first half profits, ‘wrong’ time to sell company – Irish, Business – Independent.ie
RISH Life Assurance, the state-owned life assurer, said it is the wrong time to sell the company.
The company annouced today that pre-tax profits increased six-fold to €96m last year under International Financial Reporting Standards. The group’s embedded value, an estimate of a life assurer’s worth based on future profits of existing policyholders, was €1.8bn at the end of June.
Kevin Murphy, Irish Life chief executive officer, said the assurer is “very conscious” of its taxpayer support “and we are determined to ensure that this can be repaid fully as soon as practicable,” he said. He added that the Irish life and pensions market is likely to remain tough for a number of years.