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In the Fiscal Times today, at Eric Schurenberg writes about the new normal and how it may be more dismal for financial, political and demographic reasons than other historial recoveries.  My response is under the fold.

The problem with the economy is more distribution than accumulation. Once distribution is worked out, accumulation will return to something akin to normal. Our wounds are mostly self-inflicted. We believed analysts with ties to brokerage houses when they said that pensions must be fully funded, ignoring the fact that these analysts were interested parties. Greater employee-ownership of stocks will take them out of the speculative market and convert them into a pension allocation instrument.

Population valleys are very easily ameliorated - simply give families with more children more money and families without children less money. That would also solve the perverse incentive to fire productive workers at middle age - since their wage rate absent payments for dependents would be competitive - especially if their longevity compensation is in stock dividends and not in salary.

While many billionaires have lost money - much of it was paper wealth anyway. In distributional terms, the Koch, Wall, Gates and Buffett fortunes are still quite secure. Demanding more of these families and those like them in order to reduce and eventually eliminate the national debate won't crash the economy - just the opposite - and movements toward employee ownership won't make these families broke - however it will decouple great wealth from industrial power. That would not be bad if it became the "New Normal."

Originally posted to Michael Bindner on Thu Sep 30, 2010 at 11:11 AM PDT.


What will the "New Normal" be

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| 24 votes | Vote | Results

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Comment Preferences

  •  It will be Dystopia.... (0+ / 0-)

    ...unless we can stop them before it's too late.

    If it's not already too late.

    "Ridicule may lawfully be employed where reason has no hope of success." -7.75/-6.05

    by QuestionAuthority on Thu Sep 30, 2010 at 11:14:20 AM PDT

  •  Please clarify... (0+ / 0-)

    What does it mean when you say give workers with children 'more' and childless workers 'less' in terms of their pension contributions? I understand employee-owned, my hubby works for one of those. And sure, if the company goes down, that accumulation can go away (and we'll be stuck with nothing but SS). But we're 59 years old. We had children, one of 'em died at 21. Now we have 8 grandchildren, two of those are 20. In your plan, does that mean we're back to "childless" and should have our retirement account diminished so someone younger with children can have it? Would that mean anybody whose children are grown have their retirement accounts raided to make younger workers feel better about their retirement (even though if they live that long theirs will be raided too)?

    I think I'm missing something here...

    Now, more than ever, we need the Jedi.

    by Joieau on Thu Sep 30, 2010 at 11:49:57 AM PDT

  •  No, in terms of their take home pay (0+ / 0-)

    through an expanded, refundable child tax credit

  •  As for retirement, every worker would get an (0+ / 0-)

    equal employer contribution, regardless of pay - based on the uncapped average wage.

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