> Sure, we don’t produce anything, but we have companies with high revenues and we can raise money based on those revenues. We’ll both be rich!
I think this is the central hole in the argument that the US is stagnant. The money that investors give you has to come from somewhere! Particularly in venture capital, you only get returns if you produce value.
Nevertheless, I do agree with a lot of the points here.
In my view, the stagnant part begins when extractive industries grow uncontrollably (think financial services). Yes, money is slushing around and line goes up, but ultimately the value production behind it remained the same.
Money is detached from real output. Especially true in a zero interest rate environment like we had until recently.
There is no reinvestment when rent-seeking activities and financialization take place. Wealth is accumulated but not reinvested for greater growth.
> in venture capital you only get returns if you produce value
I think this is the central hole in the argument that the US is stagnant. The money that investors give you has to come from somewhere! Particularly in venture capital, you only get returns if you produce value.
Nevertheless, I do agree with a lot of the points here.