NOTHING IS FREE—LEAST OF ALL PUBLIC SERVICES

Tax Promises, Distribution, and Financial Markets- the issue through the classical economic question of how output is distributed, then distinguishes the primary market—where financial assets are first issued—from the secondary market, where existing assets are traded and speculation dominates.

This is where Brandolini’s Law—or the principle of asymmetry of nonsense—comes into play: it’s an aphorism stating that the time and energy required to refute a piece of nonsense exceed those needed to express it. Ergo, patience and lengthy explanations.

The remaining neo-fascist presidential candidates tend to repeat ad nauseam that they’re going to cut taxes for corporations and business owners, with the laudable aim of creating jobs and stimulating growth. We’re already in a bind, because that simple assertion contains two lies. Economists know this, but they remain silent since they are the ones behind such nonsense.

As I have repeatedly argued, when it comes to economics—according to David Ricardo and the classical economists, that is, the inventors of the field—there is only one important issue: the distribution of output. The rest is hot air—or, like “Chilean salad,” it’s just a side dish.

The stock market, or “secondary” market—a prime arena for pure speculation that doesn’t produce a thing—moves a total of €3,000,000,000,000 in capital each year, or three trillion euros.

The “primary” market thus accounts for barely 0.3% of financial transactions. The “secondary” market—speculation—accounts for… 99.7%. The question is obvious: what’s the point of concentrating even more capital in the hands of the super-rich?

What follows is straight out of the textbooks that economists know by heart:

The main difference between a primary market and a secondary market is that the former is where financial assets are issued, and the latter is where previously issued financial assets are traded and exchanged.

Take a look at this: ways to invest.

What is the primary market? A market where financial assets are issued and sold for the first time. Once issued, they can be traded on the secondary market.

What is the secondary market? It is where financial assets that have already been issued and placed on the market are traded—that is, instruments that have been traded at least once before.

Commonly traded instruments include stocks, fixed-income securities, financial intermediation, etc.