Was just trying to explain to someone why everything is going to shit, specifically companies, and realized, I don’t fully get it either.

I’ve got the following explanation. The sentences marked with “???” are were I’m lost. Anyone mind telling me, if they’re correct and if so, why?

The past few years, central banks were giving out interest rates of 0% or even negative percentages. Regular banks would not quite pass this on, but you could still loan money and give it back later with no real interest payments.

This lead to lots of people investing in companies. As long as those companies paid out more money than those low interest rates, it was worthwhile. But at the same time, this meant companies didn’t have to be profitable, because they could pay out investors from money that other investors gave them???

This has stopped being the case, as central banks are hiking interest rates again, to combat inflation???

  • @[email protected]
    116•1 year ago

    There’s only one thing I would alter in your statement. You said:

    …and to focus on shareholder profits over making a good product.

    I would say, "and to focus on shareholder profits over making a good product anything else, including life itself.

    It’s more profitable for a health insurance company to deny someone’s claim than to pay for their healthcare in the US. The insurance company won’t care if that ultimately leads to the person’s death - they have to answer to their shareholders.

    It’s more profitable for Nestlé or Google to siphon water from countries in the global South than it is to have sustainable practices that don’t exacerbate climate change. So what if that means that millions of people will die in the years to come? That’s their problem for being poor.

    We need to bring about the kind of change that has politicians recognize that there is more to human life than a dollar amount, and that poverty is not a moral failing on the part of the individual. But until that happens, poverty is akin to a death sentence.

    • @[email protected]
      -7•1 year ago

      Ok but what you are asking is to crash the market, that will lead to more harm than good. Any better less drastic idea?