How capitalism is supposed to work.
Workers are supposed to get paid for their time.
They work, save and life is stable.
Investors put in money for research, take risks, etc...
In good times they make big bucks. That's their compensation for the risk they take...
Cos when times are bad, they go broke.
Both of them are supposed to save for a rainy day.
BUT... In reality...
Workers get paid for their time.
They work and spend.
Investors put in money for research, take risks, etc...
In good times they make big bucks. That's their compensation for the risk they take...
Cos when times are bad, IF the business is big enough, they can threaten the Government that if they go bust, thousands of workers will be unemployed. So please save us with a bailout.
Essentially rewarding poor and risky behaviour. Executives know this and they play the game accordingly.
They can take excessive risk cos they know the company will be bailed...