News Links 03/01/2012

By Edward Harrison On Mar 1, 2012

MMT as an ECB Alternative | Michael Hudson

governments spend money (at least in principle) to promote long-term growth and employment, to invest in public infrastructure, research and development, provide health care and other basic economic functions. Banks have a more short-term time frame. They lend credit against collateral in place. Some 80% of bank loans are mortgages against real estate. Other loans are made to finance leveraged buyouts and corporate takeovers. But most new fixed capital investment by corporations is financed out of retained earnings

tags: banks government credit mmt

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Edward Harrison 7783 posts 575 comments

Edward Harrison is a senior Editor at Bloomberg. He is also the founder of Credit Writedowns newsletter, a former career diplomat, investment banker and technology executive with over twenty five years of business experience. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.

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2 Comments

spc says 13 years ago

This is neat:

https://yanisvaroufakis.eu/2012/02/28/on-the-political-economy-of-eurozone-bailouts-the-curious-bargain-of-greeces-hayekian-neoliberals/

BTW… Raspberry PI has arrived. Rejoice!

https://www.guardian.co.uk/technology/2012/feb/29/raspberry-pi-computer-sale-british
David Lazarus says 13 years ago

At the moment current business investment has no other option than being financed out of retained earnings. Though very large companies also have better credit availability so are able to borrow at very low rates even though they have little need for capital right now. SME’s are still effectively frozen put of credit markets because of tougher lending criteria from banks so have no option to finance from retained earnings. That is especially true in the UK right now and I suspect in the US as well.

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