An interesting article in Bloomberg News this morning highlights the pernicious effect of economic inequality on economic growth. (Bloomberg is hardly a radical socialist journal since it provides news for the Investment Class.)
A widening gap between rich and poor is reshaping the U.S. economy, leaving it more vulnerable to recurring financial crises and less likely to generate enduring expansions.
Left unchecked, the decades-long trend toward increasing inequality may condemn Wall Street to a generation of unimpressive returns and even shake social stability, economists and financial-industry executives say.
“Income inequality in this country is just getting worse and worse and worse,” James Chanos, president and founder of New York-based Kynikos Associates Ltd., told Bloomberg Radio this week. “And that is not a recipe for stable economic growth when the rich are getting richer and everybody else is being left behind.”
Bloomberg: Growing Income Gap Raises U.S. Vulnerability to Crises
Has OWS taken over the minds of some on Wall Street? No, it's not that good, but it is good. Somewhat "enlightened" capitalists are beginning to worry about the Great Class Stratification, perhaps not for moral or ethical reason, but because it undermines capitalism itself and the quest for profits.
“The large and growing gap between the haves and have-nots will tend to undermine growth, both directly and indirectly -- including by reducing the marginal propensity to consume and by amplifying the political polarization that has already contributed to poor economic policymaking,” says Mohamed El- Erian, chief executive officer of Pacific Investment Management Co. in Newport Beach, California.
snip
Raghuram Rajan, the IMF’s former chief economist, says countries with high levels of inequality tend to produce ineffective economic policies. Political systems in economically divided countries grow polarized and immobilized by the sort of zero-sum politics now gripping Washington, he said.
Bloomberg: Growing Income Gap Raises U.S. Vulnerability to Crises
Keep the pressure on. OWS is making a difference. It is creating and reflecting a majority of the American people's feelings about Economic Inequality. The 99% v. the 1%.
The Obama adminstration's fight for a Jobs Bill and willingness to talk about the economic unfairness in this nation also is contributing to an awakening in the American public. Unions are making a difference. And even "enlightened" capitalists are seeing the need for change. For the near future, reforms in capitalism are in the range of possible. It is a moral, ethical and economic imperative that we reduce the Great Class Stratification.
Time released a new poll this morning finding that 54 percent view the Wall Street protests favorably, versus only 23 percent who think the opposite. Interestingly, only 23 percent say they don’t have an opinion, suggesting the protests have succeeded in punching through to the mainstream. Also: The most populist positions espoused by Occupy Wall Street — that the gap between rich and poor has grown too large; that taxes should be raised on the rich; that execs responsible for the meltdown should be prosecuted — all have strong support.
Meanwhile, the poll found that only 27 percent have a favorable view of the Tea Party. My handy Plum Line calculator tells me that this amounts to half the number of those who view Occupy Wall Street favorably
http://www.washingtonpost.com/...
Data from the poll:
Q11. IN THE PAST FEW DAYS, A GROUP OF PROTESTORS HAS BEEN GATHERING ON WALL STREET IN NEW YORK CITY AND SOME OTHER CITIES TO PROTEST POLICIES WHICH THEY SAY FAVOR THE RICH, THE GOVERNMENT’S BANK BAILOUT, AND THE INFLUENCE OF MONEY IN OUR POLITICAL SYSTEM. IS YOUR OPINION OF THESE PROTESTS VERY FAVORABLE, SOMEWHAT FAVORABLE, SOMEWHAT UNFAVORABLE, VERY UNFAVORABLE, OR DON’T YOU KNOW ENOUGH ABOUT THE PROTESTS TO HAVE AN OPINION?
VERY FAVORABLE 25%
SOMEWHAT FAVORABLE 29%
SOMEWHAT UNFAVORABLE 10%
VERY UNFAVORABLE 13%
DON’T KNOW ENOUGH 23%
NO ANSWER/DON’T KNOW 1%
Q12. DO YOU AGREE OR DISAGREE WITH THAT POSITION?
A. WALL STREET AND ITS LOBBYISTS HAVE TOO MUCH INFLUENCE IN WASHINGTON
BASE: FAMILIAR WITH PROTESTS (787)
AGREE 86%
DISAGREE 11%
NO ANSWER/DON’T KNOW 4%
Q12. DO YOU AGREE OR DISAGREE WITH THAT POSITION?
B. THE GAP BETWEEN RICH AND POOR IN THE UNITED STATES HAS GROWN TOO LARGE
BASE: FAMILIAR WITH PROTESTS (787)
AGREE 79%
DISAGREE 17%
NO ANSWER/DON’T KNOW 3%
Q12. DO YOU AGREE OR DISAGREE WITH THAT POSITION?
C. EXECUTIVES OF FINANCIAL INSTITUTIONS RESPONSIBLE FOR THE FINANCIAL MELTDOWN IN 2008 SHOULD BE PROSECUTED
BASE: FAMILIAR WITH PROTESTS (787)
AGREE 71%
DISAGREE 23%
NO ANSWER/DON’T KNOW 6%
Q12. DO YOU AGREE OR DISAGREE WITH THAT POSITION?
D. THE RICH SHOULD PAY MORE TAXES
BASE: FAMILIAR WITH PROTESTS (787)
AGREE 68%
DISAGREE 28%
NO ANSWER/DON’T KNOW 4%
Read more: http://swampland.time.com/...
Many of the American people are beginning to wise up and rise up.