Renting from Wall Street

Renegade Economists podcast 350

As broadcast on 3CR, Wed July 30th

Renting from Wall Street by Renegadeeconomists on Mixcloud

Show Notes

Christine Lagarde, Amartya Sen Lecture, 10/6/2014
Housing: where will we all live? London School of Economics, 10/06/2014
Featuring Wayne Hemmingway, Richard Blakeway, Professor Paul Cheshire, Rachel Fisher, John Stewart

London CrossRail audio – This $24bn hole has london property prices soaring

STUDY: The Income Of ‘Australia’s 1%’ Hasn’t Increased For Nearly A Decade

The income for the top 1% of Australian earners has not increased for nearly a decade, according to tax data analysed by the Melbourne Institute at the University of Melbourne.

In 2011-12 the share of total income was 7.7%, staying relatively stable from 2006 levels where it was 7.8%.

Based on taxation data, the analysis shows the 180,000 Australians in the top 1% earned an average income of just under $400,000 per year.

To be a member of this elite group, an individual required an income of at least $211,000.

Roger Wilkins, Assoc Prof and key author of the quoted report sent this link to the source data.

I often say that $60,000 is the difference between a lifetime of renting and ownership. Would accessing super help?

Nick Xenophon Wants The Rules Changed So Young Home Buyers Can Use Retirement Savings

Independent Senator Nick Xenophon wants the rules changed to allow first home buyers to pull money from their superannuation savings for a house deposit.

The South Australia Senator says a scheme now operating in Canada, allowing up to $25,000 to be accessed, has lead to improved housing affordability. In Canada the amount has to be paid back into the super fund within 15 years.

“With more and more Australians finding it difficult to break into home ownership, adopting the Canadian scheme would make a difference to many thousands of Australians each year,” he says.

He will introduce legislative changes in the Spring session of federal parliament.

No it will only increase demand, increasing the value of land. Interest rates will also go up, hurting the wider community.

Renting from Wall Street

featuring Blackstone Capital

This is paraphrased from their report, whose PDF is copy blocked. Read this excellent report. KF = my commentary.

Blackstone capital has $271 billion in assets. They own SeaWorld, the weather Channel, extended stay America some of the companies they are in responsible for.

About 40% of all money spent to acquire properties and controls about 20% of all institutional Lee rented single family homes. 43,000 single-family homes


While the collapse of 2007 sent financial shockwaves around the globe, our housing market did not collapse on itself. It was pulled down by Wall Street bankers who created complicated and speculative financial instruments designed to feed rapid growth in the mortgage market. The results were disastrous, but not primarily for the bankers and financiers that had created the crisis. Lower- middle income Americans, particularly people of colour, where hit hardest by the collapse of what had been the most reliable means of generating wealth-the single family home.

Approximately 4.4 million families lost their homes to foreclosure between September 2008 in May 2013. In 2012 alone, families lost $192.6 billion in wealth to foreclosure. As families struggled to keep their homes or get back on their feet across the United States, some of the architects of the last experiment of further financial eyes housing were dreaming up new ways to extract wealth from communities-this time from renters instead of homeowners.

A 2011 White Paper by Morgan Stanley had Oliver Chang citing the American dream’s transition to an American nightmare for many homeowners, which when combined with falling home prices, limited mortgage credit, continued mortgage liquidations, and better rental options is moving the country towards becoming a rentership Society instead of a home ownership society.

No mention of the role of the financial industry in that problem.

KF: Nor the lure of ever higher land prices. If we taxed this with Land Value Tax there would be nothing there to speculate upon nor securitise.

A few months later in 2012 the co-inventor and self-proclaimed Godfather of mortgage-backed securities, Lewis Ranieri published a paper taking its cues from Morgan Stanley’s declaration of a shift from home ownership society to rentership society. Sighting the same trends as Chang and his colleagues, Ranieri goes further to suggest that there are great gains to be made with Wall Street capital should large-scale investors use their access to cheap credit to institutionalise and financialize the single-family rental market that has been historically inhabited by mom-and-pop landlords. Likewise ignoring the fact that financialising housing speculation, aided by toxic mortgage-backed securities, caused the collapse of the American housing market, Ranieri concludes that the United States housing market ‘can be fixed if capital flows back into housing’ and financial eyes is renting.

RMBS mkt
Private equity firms and institutional investors have raised and invested upwards of 20,000,000,000 to purchase more than 200,000 single-family homes nationwide, turn in to rental properties, and create new financial instruments with rental income streams. Many of the cities and neighbourhoods targeted by institutional investors are places that experience some of the highest concentrations of sub-prime mortgages, largest drops in home prices, and most wealth extracted from communities to Wall Street, specifically from people of colour.

Starwood Waypoint, Silver Bay, American homes for rent, colony financial, Hyperion Homes, Sylvan Road Capital all have jumped into the RMBS market

It is expected the rental backed securities market will be worth one trillion dollars in five years. The market has quadrupled in just eight months since the first sale of rental backed mortgage securities.

**** Blackstone have undertaken two capital raisings,
Oct 2013 – $471bn
May 2014 – raising over US $1 billion.

They plan to extract $9,513 per property p.a and $13.3 million from Homes in South Los Angeles, and Riverside.

Standard and Poor’s wont give these rental backed mortgage securities a AAA rating but Moody’s and some junior ratings agencies in Kroll and Morning Star have.

Blackstone capital has established a number of companies to administer these property structures. Invitation homes is a prominent one. THR is a corporate structure owning some 1,400 identified properties in South Los Angeles and Riverside.

292 of these properties were surveyed in the month long period.

Must pay a bond of up to 157% a month’s rent, some were given three day eviction notices a day before rent was due!

An incident was recorded where the Invitation Home’s website crashed, rental payments could NOT be made, over three days this lasted, but eviction notices were rushed out during this time frame, even tho communication channels were down. Some leasing contracts have a $600 fine for breaking a lease, on top of the loss of bond.

Blackstone buying

They bought properties from corporations that own the property for less than a year for 86% of purchases in the market survey area.

KF: Important to note they have only bought single-family homes. That infers a detached home on most likely a large block of land.

KF: Blackstone invested $27bn in South La & $33bn in Riverside
property up 16.2% you = $10m in bounty, as a privilege for owning the earth AKA economic rent.

KF: $13.3m in extortive rents + 10m from the naturally rising value of the earth, the economic rents = a tidy return.

Vacancy rates increasing -> rents collected down 7.6% Oct – Jan.

KF: This vacancy trend will continue to worsen as these economic rents (unrealised capital gains) will subsidise any lazy land use, let alone any possible re-zoning (golden pen tick) windfalls.

Property (read land) values expected to increase a further 9% this year = $6m.

13-14 – $23.3m gain
14- 15 – 19.3m gain

KF: $42.6m gain on 1400 properties = almost doubled their $60m investment in 2 years. Nice work if you can get it.

Support the Renegade Economists work by becoming a member. Thanks to NatLuco for joining this week.

Tues August 5th – Karl Fitzgerald on Collaborative California

The decks are stacked, planet hijacked

Decks are Stacked, the Planet Hijacked: with on the global property bubble by Karl Fitzgerald on Mixcloud

Renegade Economists show 349

As broadcast on 3CR radio, Wednesday July 23rd, 2014

Subscribe to the free, weekly podcast.

Check our new mixcloud playlist, a few shows are up, only 340 more to go …..

Show Notes
this is cut n paste from my notes, its not all referenced (but most is). Pity I couldnt get to the last item.

Cities Where Millionaires Roan in Clusters
1. Monaco: 29.21% Population: 37,579
A millionaire you might bump into: Tennis champ Novak Djokovic

2. Zurich: 27.34% Population: 366,765
A millionaire you might bump into: Singer Tina Turner

3. Geneva: 17.92% Population: 184,538
A billionaire you might bump into: Biotech heir Ernesto Bertarelli

4. New York: 4.63% Population: 8.41 million
A billionaire you might bump into: Real estate mogul/”celebrity” Donald Trump

Hedge Fund dodged over $6bn in taxes
WASHINGTON (MarketWatch) — Hedge fund Renaissance Technologies used structured financial products purchased from Barclays and Deutsche Bank to avoid more than $6 billion in taxes, a pair of senators said Monday.

The report said the banks and hedge funds used the basket option structure to open trading accounts in the banks’ names, creating the “fiction” that banks owned the account assets. But in fact the hedge funds exercised total control over the assets and executed all the trades. The funds often exercised the options shortly after the one-year mark and claimed profits were eligible for the lower income tax rate.

In Renaissance Technologies’ case, the subcommittee said using basket options to treat short-term gains as long-term gains allowed the hedge fund to avoid more than $6 billion in taxes between 2000 and 2013.

Why are the BRICS starting a bank? And 9 more FAQs
BEIJING (MarketWatch) — There are no surprises, but lots of questions, about Beijing’s espousal of the BRICS bank, launched last week by China as well as Brazil, Russia, India and South Africa.

The freshly named New Development Bank (NDB) is designed to provide both development finance and balance of payments funding on a grand global scale — a clear potential rival to the International Monetary Fund and the World Bank.

More by Hudson on the BRIC bank

Euro-zone construction declines in May
The European Union’s statistics agency also confirmed Thursday that the annual rate of inflation remained at 0.5% in June.

The figures suggest that the euro zone is mired in a period of very low growth and inflation, increasing the risk that it could be pushed into a period of falling prices by some unexpected setback. Consumer prices fell on the year in Greece, Portugal and Slovakia, and were unchanged in Spain and Cyprus.
June marked the ninth straight month in which the inflation rate was below 1%. The ECB targets an inflation rate of just below 2%.

Data firm Markit said the headline reading from its monthly survey of 3,000 manufacturers across the euro zone fell to 51.8 in June from 52.2 in May.
activity slowed across the euro zone’s core, including Germany, Austria, and the Netherlands. In France, activity contracted, as it did in Greece.

Greek Property prices
In Athens, the capital and the country’s largest city, the average price of apartments plunged by 10.87% (-8.89% inflation-adjusted) in 2013 from a year earlier, according to the Bank of Greece.

In real terms 44.4% fall since 08 Athens residential

Italy’s house price index fell by 6.54% during the year to Q3 2013, according to Eurostat. When adjusted for inflation, the index actually declined by 7.58%.

The Italian economy was still in recession in 2013, with a real GDP contraction of 1.8% due to the decline in domestic demand.


QLD – lending for investment property rising from 33.5 – 38.7% Jan – June
NSW – inv loans as a % of mortgages fell from 53.4 – 45.9%

AFR – Sales Flood set to bury 2006 record

Industrial real estate transactions fur June quarter are up 124%
set to beat previous 2006 record

A strong commitment to infra projects helping
$11.5bn WEstConnext project Syd
$1.5bn East-West link Melb
$870m Perth Freight link

Whose planet is this and for whose benefit?

Gu Nets $60m in Footscray

Richard Gu AXF Group
Bought 17m 2011
Sold $60m 2014
352% return over 3 years.
Who Pays?
Housing hurts.

How does this filter thru to you?
Now $40,000 per unit , if land still at $17m = $11,333

Rental vacancy rates up, but not including Speculative Vacancies (those properties held off the market purely for capital gains).

Berrick Wilson – Call him the Chinese millionaire hunter.

Australia’s Significant Investor Visas, which are similar to U.S. EB-5 visas that come with a $500,000 investment minimum and a requirement to create jobs, are designed to attract overseas capital and eventually allow permanent residency in the country.

Immigrants are required to put the A$5 million into government bonds or complying funds that invest in assets such as infrastructure, real estate and agribusiness, for four years, according to the Department of Immigration website. The initial visa requires residency of at least 40 days a year over the period, after which permanent residency can be granted.

Prior commentary on Significant Investment Visas.

Cause and Effect: Value Capture ignored, ICAC Rent Seekers revealed

Ugandan anti-corruption sign

Renegade Economists podcasts 337 & 338

Broadcast on 3CR each wednesday 5.30 – 6pm.
Subscribe to the show

The last two episodes reveal some of the most pertinent pressures on society. How to finance the much needed (rail) infrastructure to relieve gridlock pressures? And if we do get infrastructure built, does the public accept that infrastructure makes life easier? If so, this will be reflected in higher nearby land values. But what happens if we leave this magic money, this publicly funded private windfall – untapped?

The answer can be seen in the rampant misconduct unveiled at NSW’s Independent Commission Against Corruption. Whether they are donations from miners or developers, both are chasing lightly taxed windfall gains. These are known in economics as economic rent or unearned income. Twisting the truth in such a manner is known as rent-seeking.

Windfall gains have delivered the seemingly overnight riches to Nathan Tinkler and blasted Gina Rinehart into the top 0.01%. The same can be seen in property.

The urgent need for Value Capture as a means of financing infrastructure was discussed with Melbourne Uni lecturer Chris Hale in episode 337. Listen

Read this interesting piece for more detail on TIF’s and VC.

This week’s interview with citizen journalist Margo Kingston (nofibs), fmr Fairfax journalist, focused on the extraordinary ICAC hearing. Follow Margo on twitter.

Mentioned is an article by Neil Chenoweth. I believe more is to be revealed about McNamara. How did she raise $300K and importantly, how did she leapfrog other candidates into the Federal Parliament?

Lobbyocracy – the hypocrisy of democracy!

Stay tuned to to the weekly Renegade Economists podcast, with another high profile guest coming up next.

photo by:

Real Estate a Billionaire’s Charity


Renegade Economists interview April 22nd, 2014
Subscribe to the weekly podcast.

Karl Fitzgerald: Michael Hudson – – is back on the 3CR airwaves with an explosive show moving through the incredible wealth gap as outlined by Thomas Piketty. His book is barnstorming the world at the moment. We review it, alongside a bit of Marxist theory as we slide into what America is really up to in the Ukraine. It’s always interesting with Michael Hudson. Stay tuned for another instalment of the Renegade Economists.

Sweeping the world have been glowing reviews of the new book by Thomas Piketty, Capital in the 21st Century. I’ve been pounding on the bookshop doors asking when it’s arriving, this 700-page opus. It hasn’t hit here yet but I’ve read many book reviews. Have you had a chance to grab a hold of this must-read document?

Michael Hudson: No, but I have worked on the statistics that he uses for the last 50 years, so I know the problems with the statistics and what they can do and what they can’t do. And I’ve read what he’s been publishing all along with his colleague in California, Emanuel Saez, about the concentration of wealth and income at the top of the pyramid.

Karl: And that’s the big point is that he’s renowned, along with Saez, for working on income inequality, but this book really looks at wealth inequality.

Michael: The problem with Piketty’s statistics are that it vastly understates how unequal the world really is and that’s because – you may know in Australia that our Queen of Mean, the hotel lady Leona Helmsley said “Only the little people pay taxes”. What she means is only the little people earn income. Rich people in America don’t earn income, they make capital gains and capital gains are not in everybody’s income statistics, they’re not in the statistics basically that are reported. And the IRS, the Internal Revenue Service of the United States, only conducts a study of capital gains once every ten years or so, and countries like England and many European countries don’t even have a tax on capital gains, so they’re not going to appear in the statistics.

So one of important results of Piketty’s work, if you know what you’re reading, is that the disparity in wealth is much greater than the disparity of income, and that’s because of tax avoidance by the rich. They don’t earn an income. And the same is true of corporations. The largest American corporations I think in the world are Google and Apple. Apple takes all of its income in Ireland, not in the United States, so how are you going to treat all of this? That’s the element that’s left out of this, that rich people don’t earn an income.

The other thing that is left out of the income tax statistics is of course how fortunes are really made, and that’s crime and fraud. The good thing about Piketty is he points out, why is it that French novelists and English novelists tell you much more about wealth than economics? And he points out that in the 19th century novels by Jane Austen and Balzac, the way to make a fortune is to marry into it. That’s true, but what Balzac also said is that behind every fortune is a great theft.

Now, let’s look at Forbes’ list of the richest people in Russia, China, the Ukraine or the post-Soviet economies. I can guarantee you that they didn’t make this wealth by saving up income, they didn’t earn a higher income; they stole the property by fraud and internal bribery, the same way that the great fortunes were made in the United States. The History of Really Great American Fortunes by Gustavus Myers shows how the railroad land grants made fortunes by bribing congressmen and by privatising the land. The great fortunes are made by privatising natural resources, land and the public domain, and since 1980, when the concentration of wealth and income have really taken off, as Piketty shows, this is the age of privatisation, of Margaret Thatcher, of Ronald Reagan, and Boris Yeltsin in Russia.

Karl: But that’s been the interesting point is even with these limited statistics, he’s had to delve into the tax records to try and find this incredible wealth that’s come through privatisation, that’s come through this rent-seeking. That even with all those limitations you’ve pointed out, he has still come up with some incredibly strong statistics that people like Paul Krugman are just floored by. And it seems like it’s slapped the economics profession in the face to say look, we’ve got to get beyond income inequality and really focus on this wealth issue and have a look at how this wealth is created and what we can do to redirect economics, to look at the distributive side of the equation.

Michael: You’re right. He’s started the discussion by showing the fact of vast inequality. What needs to be done now is to explain how did this inequality come about and what do you do about it? And as you and I have talked on this show before, the solution of simply taxing fortunes, which is very hard to do, is a very broad hammer. And you and I have spoken about particular kinds of wealth and particular kinds of making fortunes are predatory, and that’s namely economic rent, whether it’s land rent, natural resource rent, monopoly rent or the kind of money that the financial sector makes. So Piketty’s book, large as it is, didn’t discuss this except at the end to say “Well, you need to somehow tax the wealth away”. Well, that’s true, but that’s for another book in the future. How do you tax it away? What’s the best kind of tax to make economies grow?

One of the things that Piketty does not discuss when it comes to making fortunes is the role of debt, that most of these fortunes that have taken off since 1980 have taken off because of the increased debt leverage. As interest rates have fallen since 1980, you’ve had more and more bank credit going in to just bid up real estate prices, stock prices, bond prices, every kind of price, not to mention fine arts trophies that have gone with this. So, just as you’ve had the rising ratio of wealth to income of the 1%, you also have a rising ratio of debt to income. And so this indebtedness and the net worth again is very unequally distributed. Most peoples’ families, the major asset they have is in their home but these homes are also very heavily mortgaged and the mortgage payments they make, basically the 99% makes interest payments to the 1%.

And what to me really has been accelerating wealth at the very top is the financial sector, is the ability of the 1% to get the other 99% in debt to them by saying “Look, we’re controlling the access point to buying a home, to buying basic needs, in America to getting an education, and you can’t afford to buy a home or get an education or even a car without borrowing money. And we’re going to charge you enough interest so that everything you earn in effect you’re going to be paying us for interest”. And that’s the same thing that is leading the corporate raiders and the activist shareholders to try to raid corporations and say “Pay up more of your money as dividends”.

So you’ve actually had a dismantling of tangible wealth and an increase in what used to be called fictitious capital or fictitious wealth, which is all basically debt leveraged wealth.

Karl: Now one of the things Thomas Piketty goes into great detail and has earned him quite a few plaudits is looking at the difference between economic growth rates and the return on investments. And his general thesis is that when the economic growth rate falls below the long term average of 5% that the wealth gap accelerates because the wealthy, who own all this land, the mines, the privatised utilities, they can claim a greater return than what the rest of the people who actually have to rely on earning income when there’s low growth rates. And the thesis is that with an ageing demographic we have a period of low growth coming and from that we’re going to see an increased inequality in wealth. So this Gilded Age has really only just begun. What did you think of that thesis?

Michael: I think his conclusion, the gilded age is just beginning, is correct but the logic is not the logic that I’m following in my exposition. He’s saying the exact opposite of Adam Smith. Adam Smith said that the rate of interest is often highest in countries going fastest to ruin. So the fact is you can go to ruin for high interest or low interest.

When he talks about the rate of return the largest sector in the United States, and other countries also, is the real estate sector. If you look at from 1945 to today, the real estate sector doesn’t make an income. As you know, real estate by the billionaires is run as a personal charity. They don’t pay any income – if they made an income, of course, they would pay an income tax and declare it, but they don’t make any income. Almost all the rent they make is paid out either as interest or they charge depreciation as a cost. So what Piketty is referring to is not earnings before interest, taxes, depreciation and amortisation, but one portion of declared earnings excluding taxes, excluding interest, excluding depreciation and amortisation. The next highest wealth industry is oil and gas, they don’t declare any income because either they have a depletion allowance that makes them tax-exempt or they make all their income offshore in the flags of convenience countries. So the actual returns that are made, including the capital gains and total returns, simply are not available in the statistics that he looks at.

Secondly, what is growth? If you look at the American National Income & Product Accounts, for instance, 40% of all corporate profits in America a year ago when the statistics came out were made by the banks, by the financial sector. Now, these returns are basically a transfer payment. They don’t really add to growth. Financial services are not a service, unless you believe that a hold-up man that comes up to you in front of an ATM machine and says “Your money or your life” is giving you the service of giving you your life; it’s actually a transfer payment. He’s taking your money.

So there’s a question about whether all this financial activity and the real estate speculation and all this money paid to Wall Street and to bank managers and corporate managers really is growth or is it just a kind of fictitious growth to go hand-in-hand with the fictitious capital formation? You’re having the statistics take on an increasingly fictitious element, to the degree that they’re made by corporate tax accountants that pay enormous sums to the government not to tax the income they have. I think you have that in Australia in the mining sector where the richest lady in Australia pays a lot of money to make sure that she doesn’t earn a penny. Although she obtains for herself billions per year, none of this is really earned.

Karl: You’re on 3CR’s Renegade Economists and this week we’re with distinguished research professor Michael Hudson, the author of The Bubble & Beyond.

So Michael, what you’re saying there is that, shocking as Piketty’s statistics are, they’re drastically understated and part of the reason that people such as Paul Krugman – you know, he’s written a book review where he says here “Even if the surge in US inequality to-date has been driven mainly by wage income, capital has nonetheless been significant too”. So why does Paul Krugman continue to ignore this incredible wealth advantage that some people have by owning the Earth and the rest of us struggle to keep up with good old wages?

Michael: The simple answer is that Krugman is a neoclassical economist. Neoclassical means anti-classical. He does not recognise that there is such a thing as economic rent. He also got in a big argument with your Australian Steve Keen two years ago saying that banks don’t create credit. “All banks do,” Krugman said, “is lend out savings.” He said it’s inconceivable that a bank can actually create credit or inflate asset prices.

So Krugman is applauded by the right-wing to be their liberal of choice not because he understands the economy, but because he doesn’t understand the economy. If he understood how the economy worked he wouldn’t have won the Nobel Price, because that’s a prize for people pretending that there’s no such thing as economic rent; there’s no such thing as unearned income. And that’s why Krugman’s focus is on, well, the real problem is that these managers of companies are paid so much more and they earn so much more income. But he’s even wrong as to his statistics and, remember, he’s a professional bank lobbyist. He’s paid by the banks. He went to Iceland to support the banks against the government trying to rein them in. So, of course the bankers love Krugman because he’s their lobbyist.

Take the Wall Street incomes that he’s pointing to. In the United States, under US Tax Law the income they make is not really an earned income; they make most of their money through stock options and trading gains, speculation. These are countered as capital gains and not taxed as normal income, but taxed much lower. So once again we have this fictitious accountant’s view of the world of what is income and what isn’t income. And looking at the tax returns one’s obliged to use, the categories that these tax accountants who’ve paid enormous sums to governments to distort content of and to make it appear as if the wealth really doesn’t exist. That’s why they call financial wealth “invisible wealth” in comparison to real estate, which is visible wealth. The whole idea of wealthy people is to make their wealth invisible because if it’s seen it will be taxed and it’ll be resented.

Well, what Piketty has done is make this wealth seen. So at least by his wealth statistics he says “Look, we see it there and we can measure it and we can see how unequal it is. What we can’t see is really how they got this wealth. All we have to show is the income tax statements that reflect the degree to which this wealth finds its counterpart in income”. But it’s sort of like looking – if you drop your keys you look where the light is instead of where you dropped the keys. All he has to go on statistically are the income tax records and he’s done an enormous technical job there, and that’s the only job that one can do as a starting point.

But one would really have to spend even more time reworking the statistics to untangle them to find out what is the actual reality behind this. You’d have to say “What are the capital gains that have enabled these Wall Street and financial managers to make an income?” And their contracts are very clear as to what makes it. To the extent that a corporate manager’s income is tied to the stock price, they get either a bonus or they get a stock option. Well, if they get a bonus based on the stock price what are they going to do with corporate earnings? They’re going to take the corporate income and instead of investing in new equipment and plant, instead of developing a new market, instead of producing more, they’re going to use the money simply to buy up their own stock instead of capital investment. So by buying up the stock, the stock price goes up and they can say “Look at how my management of the company has increased the price of the stock, give me my higher compensation and my stock options and my bonuses”.

So the failure to tax these capital gains away, the sort of free lunch, is leading to the warping of the economy that produces the statistics that Piketty’s come up with.

Karl: So Piketty’s book Capital in the 21st Century is essentially a retake of Marx’s Das Kapital?

Michael: I don’t believe that one bit. That his public relations at work. This has nothing whatsoever to do with Marx. Marx’s Das Kapital focused on depreciation. It was Marx who coined the term “primitive accumulation” meaning privatisation and fraud. Piketty’s analysis is completely different from Marx, despite the fact that his parents were Trotskyists.

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