Sectoral Balances

Sectoral balance macroeconomic equation, Godley & Cripps

 

Where S represents demand side savings

m:  imports

x: exports

I: supply side investments

g: government spending

t: treasury revenue

 

Trade deficit (m-x), stock market investment (I) in Chinese corporations, shadow banking and immigrat transfer of earnings back to families left behind all lead to a drain on liquidity and wealth away from internal American markets, demand side wealth and liquidity. While this loss imposes an every day sad reality to working America a growing wealthy class of international elites living on the supply side of the equation prospers in blissful denial. As direct beneficiaries of globalization the globalist elite look the other way.

 

A graphic representation of Capital displacement and its consequences might suggest:

 

Globalization                                       leads to                        Capital divergence

Democracy                                          devolves into               Oligarchy

Freedom                                              gives way to                 Idealogical subversion

Internationalism                                   evolves into                  Communism

Equality                                                turns into                      Dystopia         

Middle/Working class                           Looses to.                    Cheap foreign labor

US Manufacturing might                       Underwrites                 Chinese growth and military