In a New York Times story from October 17th, a long analysis of the current state of the economy exposed the trap that income inequality poses for national growth. This would seem obvious as countries that have the highest income inequality are countries that suffer permanent, disabling lack of growth; at least for the majority of the population. Entrenched in a culture of favoritism, an unresponsive government that is choked by commercial/corporate interference and corruption, poor economies seem to rarely find their way out of the cycle of poverty.
What the article states with attributes and quotes to IMF and economists is that now that the decline in wealth distribution has hit first world countries, they are taking serious notice. What they find confirms what many can figure by pure observation; as countries sink further downward, the climb back into stability and growth becomes more difficult. What the article did not spell out was how corporate infiltration into governments leads to much of this as governments, for lack of cash sufficient to serve even basic functions, becomes more and more dependent upon corporate/private market manipulation. Of course, this manipulation benefits those with interests in such as investment assets with increasing concentration at the top where global investment is broader.
The article also mentions the concern about social stability within countries suffering economic collapse. The United States could well be falling into its last throws of empire as it spends wildly on military infrastructure in an effort to maintain global domination. At the same time, the United States has increased its investment in military control of its citizens through increased militarization of municipal police units and build-ups of domestic armies (National Guard). The article elludes to the real fear on the part of the administration that economic unrest could lead to domestic unrest. The elite, as is often in more oppressive and poorer countries, have no interest in improving the conditions of the people, but in preserving their interests exclusively. Hence when the Times quotes the Organization for Economic Cooperation and Development, “The Organization for Economic Cooperation and Development this year warned about the “negative consequences” of the country’s high levels of pay inequality,”
One could interpret such a warning as a dire whistle blow to for the plutocrats to stop their squeeze of the global economy for their own interests. But instead, it appears, if observations are correct, that the real concern is a social upheaval from angry citizens that must be checked, not answered. Must be suppressed, gassed, arrested and possibly even detained without trial or charge for as long as desired — by the government.
The report goes on to say that the IMF has warned the United States that its policies of favoring the wealthy over the many will lead to further disaster as well. But if one watches network news they probably won’t know that. They won’t understand that just possibly those who watch the United States and the world see the US teetering on the brink of complete ruin. The paper goes on to show that most of the common people have been sold down the river with the con that home ownership is the answer to stability. But housing values have depressed, after falling from the longest and biggest fraud perpetuated on the people now stuck with devalued property and an employment cycle than no longer can produce a living wage.
The writer continues by explaining correctly that the asset holdings of wealthier individuals and of course corporations, are concentrated in investment portfolios that rise and fall with the trading and financial markets worldwide. These investments, unlike a house, will produce revenue as long as the peripheral economy of stock market trading, derivatives, hedge funds and other instruments continues to grow. They grow as they are pegged to the continued shrinking of the share of the economic pie worldwide. As worker’s wages are crushed and de-regulation of industry and finance continue while productivity remains stable, if not growing (because people must produce more to earn enough to make ends meet), investment portfolios remain in an upward growth cycle.
Therefore, there’s plenty of room to conclude that as long as the plutocracy that holds a strong interest in depressing wages and disempowering workers by attacking labor law, increasing suppression of dissent they will prosper. This theme drives the story and is well documented. What is troubling though is that it ends with a quote from the right-wing Heritage Foundation that got the last word blowing its scare-horn, that no matter what any intelligent observer thinks or researcher finds, continued investment expansion directed policies will contribute to growth.
That is what the reader will take away. Possibly the writer was hoping to make a contrast; to make a point by showing that despite all evidence to the contrary, the right -wing of the country pushes the same old lie. Unfortunately, ending with a negation of what was in fact a very well written article will be the final taste in the mouth of the reader. Not a good thing when the goal was to convince the reader of the truth of the entire piece.