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View Diary: Wealth Condensation: Why the Rich Get Richer (172 comments)

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  •  Great Point About Listing Assets (11+ / 0-)

    It reminds me of how annoyed I always get when I listen to people like Boehner or Cantor talk about how "the country is broke."  Excuse me?  How can the country be "broke?"

    We still have all the same assets we did before, the same plants, the same farms, the same IT, the same workforce, all the same natural resources.  We didn't suddenly wake up to find out that we'd misplaced Kansas and now we can't make ends meet.

    What we have is a failure of the economic engine to keep chugging, and unfortunately that tends to be a self-reinforcing failure.  The credit crisis and the sudden loss on paper of people's home values dried up demand.  This slowed business, and put people out of work.  That further dried up demand.  Etc.  And, of course, with the economy in the toilet, tax revenues went down.

    But people like Boehner and Cantor want to use the fact the engine has stopped running to argue that the engine must be "broken" and therefore putting any new gas into the car would be a waste of money.

    Oh, and one other thing about "listing assets."  I like your point about how the economic elite basically own all of these assets, but the idea of liquidating them in order to pay for the things we need is not on the table.  Compare and contrast this with a proposal from - I believe - Michigan, that would deny unemployment benefits to people who get laid off unless the value of all their assets is also below a certain threshold.  So if you lose your job but have $5,000 in savings, you will be forced to blow through your savings before you can apply for job assistance.

    When it comes to further impoverishing the already luckless, America seems to be A-OK with that; when it comes to demanding the people who have accumulated all the country's assets kick something in, that's class warfare.

    Oy.

    Politics is the neverending story we tell ourselves about who we are as a people.

    by swellsman on Sat Sep 24, 2011 at 11:42:44 PM PDT

    [ Parent ]

    •  Regarding the ending of unemployment benefits... (1+ / 0-)
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      Kanscott

      They are arguing we should end unemployment benefits under the theory of "moral hazard."  However, under the Pareto Principle, the moral hazard of underwriting the costs and risks of business is an even greater moral hazard, by a scale of several degrees.

      This is another example of how the risks of loss are shifting from the owners of capital to the workers who make those businesses what they are.  Combine this with student loans (which impede competitiveness on new and innovative intellectual capital -- something I call a "barrier to entry"), along with the shifting of retirement and health care costs (under the mantra of "responsibility") to those who are less capable of monitoring them until it is too late and they are paid far too little to be able to adequately save for these costs when they come due (which is why in the past owners of industry were charged with doing this for them because they had the expertise -- or could hire it -- to look out for them).

      Therefore, the worker, the innovator and the human capital that potentially could drive the country as a whole forward becomes dependent on the goodwill of their employers (which, we are finding, does not really exist).  In the end, a lot of talent goes wasted because people never reach their potential because they can neither move to the job that most suits them, nor start their own business "building the better mousetrap" because they are not able to get access to the capital they need to start a truly small business (as opposed to the definition of "small business" in the law).

      Like I said, I feel like I could write a book on this!

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