Welcome to the new feudalism
Re: East Side businesses feeling the pinch, Jane Mundy, January 27, 2017
Rising rents, taxes, cash-strapped homeowners blamed for recent spate of closures
Letter in Vancouver Courier; Vancouver, B.C. 09 Feb 2017
In medieval times, barons and lords extracted the maximum of feudal dues, keeping serfs at subsistence levels.
Today we allow financial institutions to lend greater and greater amounts on property, which increases sales prices and leads to rising rents. These rents are converted into ever higher interest payments collected by the banking elites. Some 40% of corporate profits now flow into the financial sector.
Welcome to the new feudalism, where renters and small businesses struggle to survive, paying tribute to a money-lending aristocracy who grow rich in their sleep.
Finance is Not the Economy
"Finance also accounts for some 40 percent of corporate profits. But our point is that financial “profits” in the classical scheme are largely rents, not profit. They are not the same thing as industrial earnings from tangible capital formation.
In the end, “wealth creation” in the real estate market was fueled by mortgage loans larger than the entire GDP. Each loan was a debt: total mortgage debt doubled relative to the economy in 25 years. That was the cost of “wealth creation.” It is not real wealth. It is debt which is a claim on wealth. It derives not from income earned by adding to the economy’s “real” surplus, but is a form of rent extraction eating into the economy’s surplus.
An economy based increasingly on rent extraction by the few and debt buildup by the many is, in essence, the feudal model applied in a sophisticated financial system."
Modern Monetary Theory in Canada