Michael Hudson talking about the problems brought on by a few decades of rent extraction
Thanks to the deregulation of most of the world's economies, and the lowering of (corporate) income and wealth taxes, rent extraction (via insurance, mortgage, interest, loan payments) has taken immense flight. In no small part due to public property of most of the world being sold off ("privatized") as a condition for entry to the "world market" (or EU/eurozone), enormous amounts of money have become concentrated in the hands of people who want to invest it or move it abroad, to keep it from the prying eyes of local governments (and prosecutorial offices). One consequence of this is that avenues for profitable investment are scarce relative to the (rising) amount of money that can be invested this way. This is partly due to economies and societies 'maturing', partly due to existing debt overhang stifling new investment.
Nevertheless, the past few decades have seen an enormous "wealth" growth (mainly in housing and related industries such as DIY, kitchens, home decoration, gardening, car sales due to life in suburbia requiring car ownership). However, this has been funded through private debt in the form of mortgage sales, car loans, student loans, lease agreements, and the like.
Where in the 1970s, a home could be financed out of a single earner's income, by now mortgage payments (and consequently house prices) have increased from 25-30% of a single income family to 25-45% of a dual-income family. In other words, we are living in an age in which up to 45% of the family income will be garnished by the banks for up to 30 years. And similar patterns can be found when looking at student loan payments, insurance payments, and the like. As such, disposable income levels have dropped precipitously.
But even though 2008 might be thought to announce this "growth" model's intellectual bankruptcy, it hasn't. And since 2010 especially, housing prices have been going up again, especially in places with restrictive land use policy. This is in no small part due to capital flight, which generates a strong (additional) upward pressure on housing prices -- especially but hardly only in the West's capitals and pretty cities --, plus incentives for developers to build for investors -- housing that by and large will never be used; even as this demand makes the building of affordable housing commercially uninteresting. This is a huge problem for those who actually have to live in those places, and it is for those of us who do that this talk is probably most interesting. So I hope you enjoy.