Financialization distorts economy from "summary" of The Money Culture by Michael Lewis
Financialization is the process by which financial markets, financial institutions, and financial elites gain greater influence over economic policy and economic outcomes. It is a deeply ingrained trend in modern capitalism that has far-reaching implications for the overall health and stability of the economy. As financial markets become more dominant, they tend to prioritize short-term profits over long-term sustainability, leading to a distortion in economic priorities and decision-making.
One of the key ways in which financialization distorts the economy is by incentivizing risky and speculative behavior among corporations and individuals. When financial markets place a premium on quick profits and high returns, businesses may prioritize activities such as stock buybacks and financial engineering over productive investments in research and development or worker training. This can lead to a misallocation of resources and a lack of investment in the real...
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