Was just trying to explain to someone why everything is going to shit, specifically companies, and realized, I don’t fully get it either.

I’ve got the following explanation. The sentences marked with “???” are were I’m lost. Anyone mind telling me, if they’re correct and if so, why?

The past few years, central banks were giving out interest rates of 0% or even negative percentages. Regular banks would not quite pass this on, but you could still loan money and give it back later with no real interest payments.

This lead to lots of people investing in companies. As long as those companies paid out more money than those low interest rates, it was worthwhile. But at the same time, this meant companies didn’t have to be profitable, because they could pay out investors from money that other investors gave them???

This has stopped being the case, as central banks are hiking interest rates again, to combat inflation???

  • blackbrook
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    1 year ago

    What you describe is the basic structure in our economy that drives this, but the answer to why the enshittification has been accelerating, is technology. Advances in technology, particularly information technology, progressively enable corporations to be more efficient at all this, including more efficient at gaming the political system and manipulating users and customers.

    If you look back nostalgically at some time decades ago when things were less bad, it’s because things were less efficient and humanity was more likely to sometimes get in the way of the machine that we’ve built having it’s way with us.