Thursday, March 31, 2011

Michael Hudson/Factor Cost

Changes accumulate, and as one gets older the world becomes irritatingly different. Little things. People use SLASH too much. People say it like a word, even.

Yet here I am with the post title: michael hudson slash factor cost.

Yeah, but you know, it's not like I'm saying "GNP/GDP" or something. Nobody thinks "michael hudson" is a number that you might mean to divide by a number called "factor cost." No ambiguity there.

A Gang8 message from Michael Hudson this morning links to his "article for Thursday’s Counterpunch."

From the article:

The rake-off charged by banks from sellers and buyers alike (not to mention late fees that yield the card companies even more than their interest charges these days) has been a major factor eating into retail profits and personal incomes.

The money that accrues to finance eats into profit and personal income. The factor cost of money competes with the factor cost of labor and of capital. The factor revenue accruing to the financial sector takes away from the factor revenue accruing to the productive sector. Excessive finance hinders productivity.

This is the source of the stagflation problem that arose in the 1970s, and has not yet been solved.

cf Interest as Factor Cost
cf How Debt Works

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