Business Insight Zone

This Deal Journal interview with author/professor Lawrence Mitchell intrigues both the business journalist and the historian in me:

Welcome to America, Home of “The Speculation Economy”

DJ: But part of the success of America has been its ability to innovate with finance.

LM: A tiny, tiny fraction, less than 3%, is for new offerings. The rest is secondary trading. If we’re not financing productivity, what are we financing? You start to see this sort of second-order level of remove from production and industry, of finance taking on its own independent logic, where money is moving from one pocket to another but not landing any place where it’s making any difference.

DJ: So we’re in danger of falling down the rabbit hole of finance?

LM: I’m deeply worried that unless we pay attention to restoring a basic balance to our economy, and redirecting finance to its original goal — which was to finance productivity — then we’re going to find ourselves in the long term in very bad shape.

So now I’ll just be scurrying out to lay hands on Prof. Mitchell’s book.