Income inequality...Capitalist Arise !!

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Income inequality...Capitalist Arise !! - 10/14/2015 3:54:11 PM

MrRodgers

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The billionaire hedge funder Paul Tudor Jones is scared. My friend Ken Langone, a founder of the Home Depot, is scared. So are many other chief executives. Not of Al Qaeda, or the vicious Islamic State or some other evolving radical group from the Middle East, Africa or Asia. We are afraid where income inequality will lead.

We are creating a caste system from which it’s almost impossible to escape, except for the few with exceptional brains, athletic skills or luck. That’s why I’m scared. We risk losing the capitalist engine that brought us great economic success and our way of life.

The fact that real wages have been flat for about four decades, while productivity has increased by 80 percent, shows that has not been happening. Before the early 1970s, wages and productivity were both rising. Now most gains from productivity go to shareholders, not employees.

Today, too many corporations reduce investment in research and development and brand building. As a result, we see a general decline in the value of their brands and other assets. To make up for those declines and for anemic revenues, businesses buy back their stock (now at record levels) and thus artificially boost earnings per share.

This is not populist or liberal or progressive spiel but a capitalist talking and his first admonition is that "We are creating a caste system from which it’s almost impossible to escape, except for the few with exceptional brains, athletic skills or luck. That’s why I’m scared. We risk losing the capitalist engine that brought us great economic success and our way of life."

Then goes on to say "Business has the most to gain from a healthy America, and the most to lose by social unrest or punitive taxation. Business can start the process in two steps. First, invest in the actual value creators — the employees. Start compensating fairly, by which I mean a wage that enables employees to share amply in productivity increases and creative innovations."

So no, the commentary about inequality is not originating from some envy, or class warfare that Buffet himself "if it exists...his class his winning."

HERE

Q & A on the article

No, this is an objective observation by one of the 1%ers who sees the future in America if such inequality continues of worse...if it gets worse. This was written by PETER GEORGESCU, the chairman emeritus of Young & Rubicam, who is at work on a book about the death of the middle class. Young & Rubicam

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RE: Income inequality...Capitalist Arise !! - 10/14/2015 4:53:25 PM

cloudboy

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Robert Reich adds that its a drag on the whole economy because of the fall in consumer demand. Concentrated wealth at the top stagnates and does not circulate in the economy.

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RE: Income inequality...Capitalist Arise !! - 10/14/2015 5:14:12 PM

MrRodgers

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quote:

ORIGINAL: cloudboy

Robert Reich adds that its a drag on the whole economy because of the fall in consumer demand. Concentrated wealth at the top stagnates and does not circulate in the economy.

In addition, I'll look it up but a study was one to show how capital drawn to speculation which also feeds the hedge fund business, bonds and yes, existing large and small cap stocks is a cause for further stagnation in that fewer dollars are drawn to productive investment in say entrepreneurs, creating jobs and new products which is even more jobs.

Seems the govt. tax structure does create an incentive for trading paper if only because it is not taxed any differently than actually making something or doing something. The tax code needs a sale tax on the purchase of paper and a transaction tax on pure speculation. With a much smaller tax on IPO's and on new venture investment.

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RE: Income inequality...Capitalist Arise !! - 10/14/2015 6:43:10 PM

MrRodgers

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Notice too that these captains of industry are not scared of inequality because of the immorality of the tax code that helps cause and reinforce it, or are they scared of the immorality of the failure to reward higher productivity and instead use stock buy-backs for higher returns and immorality of leaving profits offshore, causing at least in part, the borrowing to pay dividends.

No, they are scared because the great capitalist proletariat might rise up and first exercise a little too much democracy and pass crushing taxes but also might cause civil disturbances. Then they all fail to mention that the repub candidates claim to fix it all by doing what ? Reducing taxes on the wealthy, further exacerbating inequality and blowing up the deficit even further leaving the young to pay the debt service and maybe, just maybe...some principle, although I doubt that.

As I have been saying, these corporatists and their political hirelings are not from your father's American dream. My father was compensated for his increase in productivity until of course he was victim to the corporation not innovating and bringing any new products out for a generation, soon being laid off and after overseeing a $3 million addition to a site in downtown Detroit that the company was soon to abandon altogether.

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RE: Income inequality...Capitalist Arise !! - 10/15/2015 1:05:58 PM

tj444

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quote:

ORIGINAL: cloudboy

Robert Reich adds that its a drag on the whole economy because of the fall in consumer demand. Concentrated wealth at the top stagnates and does not circulate in the economy.

demographics is working against the economy as well.. boomers are starting to retire (the US is about 10 years ahead of Canada on that) and they dont need to buy much anymore so any money they have is gonna sit in stocks or whatever but not circulating thru purchasing "stuff"..

More and more people are paying 50% or more of their income just for housing.. the govt takes their cut.. whats left to live on, let alone spend frivolously on "stuff"?

as far as starting a business goes, there are a lot of things working against you there too.. a lot of the 1% started businesses when there were less govt regs, laws, etc, few large corps to compete with, demographics worked for them with the boomer buying boom back then.. I would like to see them try to do that now and see how far they get..

eta- there are now more billionaires in China than in the US..

< Message edited by tj444 -- 10/15/2015 1:08:18 PM >

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