Essay: The Issue of Financialization
After going through the book, one cannot fail to note that, this is a great piece of work written in an academic format and is fully referenced offering enormous economic knowledge. The book is written in a simple economic language with illustrations that aid the reader to clearly understand the contents. However, despite clearly discussing the issue of financialization, Foster and Magdoff rejection of re-regulating finance as a tool to control capitalism hence protect the work needs to be explained further.
This is because re-regulating finance through a fiscal policy employed by the federal government can control the taxes that escalate during the great economic meltdown. Further, it is these taxes that result to inflation that is reflected by increased price of household goods. Despite the increased price of commodities, the workers income relatively remains the same hence reducing the marginal propensity to save. This basically means that re-regulating finance can be employed as a tool that can protect the workers. Foster and Magdoff need to explain this issue further and in detail since I am not convinced by their argument about re-regulating finance. Another issue that needs to be clarified by the two authors is about the ability of the US government to remain a lender of last resort due to the combination of debt expansion and economic stagnation. This argument that debt deflation efforts by the federal government are likely to resemble that experienced by the Japanese government in the 1990s needs to be explained further since these two government employ different monetary and fiscal policies.