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I cringe every time someone tells me “it’s a market economy”. I understand the economic reality of this statement, but it also signals a loss of control.
What is the market economy? It’s the value of your 401(k) tanks. It’s when gas and natural gas prices skyrocket because of decisions made 3,000 miles away. That’s why everything from equipment to surgeries costs too much.
Nomi Prins is someone who knows the inner truth of the market economy. As a former Goldman Sachs employee, she’s seen it and lived it. In her new book, Permanent Distortion: How the Financial Markets Abandoned the Economy Forever (Public Affairs, 2022), she once again speaks truth to power.
Permanent Distortion is an exposé of how the global economy became “irreversibly fractured”. When it looks like the economy is slowing down, stocks go up. Pitifully low savings yields mean huge gains in the bond market for most Americans. Down markets mean big profits for computerized trading on Wall Street.
“We live in a permanently polarized world, where the mega-rich are the winners and the never-rich are the losers of an unprecedented distortion that can never return to ‘normal,'” says Prins, whom I’ve interviewed over the years , mostly after financial crises. “Moreover, more chaos will come as central bankers try to clean up a mess of their own making and inflation and other crises rage.”
how did we get here A cult-like obsession with the market economy. This leads to a massive distortion of global reality: “The real economy – for the average worker – can be measured in terms of productivity and results,” adds Prins.
“It behaves more according to the traditional rules of money and economics. The financial market economy – not. It has become a synthetic by-product of years of loose money fabricated by central banks, greasing the wheels of a system dominated by financial titans. This is why stock markets can soar in the face of a global pandemic and the threat of nuclear war. It is also why the real economy continues to lag markets during financial, social and geopolitical turmoil.”
This is a must if you want to understand the underlying misdirection of global economic policy. I wish I could say this was virtual reality, but for all but the ultra-rich, it’s all too real.
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I speak and write about innovation, investor protection, retirement, money management, history and social issues. My latest book is “Lincolnomics”. In all I’ve written 19 books including Keynes’s Way to Wealth and Lightning Strikes. I’ve also written for The New York Times, The Wall Street Journal, and other global publications. I have appeared on CNN, FOX, NBC, MSNBC, NPR, PBS and radio stations from Australia to Israel. I’ve spoken across North America.
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