By:

Dave Kingsley

Here are some questions to ponder: Why would the Family Office of a Billionaire be a major investor in a nursing home located in the tiny Southeastern Kansas town of Cherryvale?   Why would TIAA-CREF – a teachers, insurance, and annuity program – be the biggest owner of land in the Mississippi/Arkansas Delta?  Why would the Harvard Endowment Fund buy up forest land in Europe? 

The answer to each of these questions is that the U.S. economic system has undergone radical change in the past fifty years.  Indeed, the economic ground has shifted under our feet.  This shift has been tectonic, global, and influences every institution of society.  Much of government responsibility for the “general welfare” has been privatized and provides opportunities for investors with an immense amount of accumulated capital.

 Regardless of the theory of political economy to which one subscribes, throughout the past fifty years, monetary, management, and regulatory theories have driven a merger of government and business into a wild, wild west of unfettered capitalism.  This corporatocracy has resulted in massive pools of wealth in the hands of ultra-high net worth individuals, corporations, and institutions such as universities and sovereign wealth, and retirement funds.

Like water naturally seeks its own level, capital flows toward return on investment. In addition to a high return, investors seek protection from taxes, creditors, and all forms of liability.  Many state legislatures have accommodated that tendency by enacting laws for protecting and hiding assets.

Among other things, these massive pools of capital have resulted in monetization of every societal issue from crime to end of life care. Indeed, as the previous post indicates, even housing in neglected, abandoned, and deteriorating neighborhoods have been attracting private equity funds and institutional investors.

 Revenue producing real estate has become central to the institutionalization of human commodities such as frail elders, prisoners, soldiers, and troubled youth. Government guaranteed revenues are transferred opaquely from middle- and low-income strata of society through captured agencies, and secretive networks of shell companies to family offices, holding companies, Real Estate Investment Trusts, and other investment vehicles.

It is important for those of us advocating for economic justice to focus on how the economic system works and what it portends for the future of institutionalized Americans and the future of democracy.  The COVID pandemic swept through long-term care facilities, meat packing plants, and prisons because in the current economic system management theory accords priority to investors over stakeholders.  Patients, customers, inmates, students, and communities are not the priority of management – finance and extraction of value for shareholders is the top priority of executives, and this aided and abetted by government.