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???

  • m-p{3}A
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    1 year ago

    Most of these businesses operated at near unsustainable levels with almost negligible interest rates on loans, and now they’re panicking because their business model is shit and they’re trying to recover however they can by enshittifying everything.

    • intensely_human@lemm.ee
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      1 year ago

      I think it’s cultural. An entire generation has now been raised to believe that capitalism is inherently oppressive. Therefore they unconsciously or consciously believe that they must oppress their customers as part of the money-making ritual. And since capitalism doesn’t inherently produce that oppression, they have to add it in the form of products getting worse.