It’s not too difficult to pinpoint where the U.S. economy went wrong for the middle class. What is needed is a rollback to 1980, before supply-side replaced Keynes as the primary economic model, the progressive income tax was scrapped and deregulation and union-busting became the rage. Repeal Gramm-Leach-Bliley, which created the conditions for the 2008 collapse, and invest in alternative energy which would make the U.S. less vulnerable to the inflationary pressures created by the OPEC embargo in 1973-74. None of what has happened over the last three-and-a-half decades is a surprise; many of us well-versed in macroeconomics predicted the consequences of Reaganonomics, but couldn’t win the rhetorical battle at the time against the flag-wavers.
The “rising tide” theory has always struck me as odd. A Tsunami is also a rising tide, one that is concentrated more greatly toward the top, and sinks all the boats beneath it. The rising tide only lifts all boats when it rises evenly, which it doesn’t when 90% of GDP growth goes to only 1% of the populace.
“Invisible hand” true believers overlook the other writings of Adam Smith, the creator of the theory:
“When the regulation, therefore, is in support of the workman, it is always just and equitable; but it is sometimes otherwise when in favour of the masters.”
“It is not very unreasonable that the rich should contribute to the public expence, not only in proportion to their revenue, but something more than in that proportion.”
The purpose of banking regulations was to oblige “all of them to be more circumspect in their conduct, and by not extending their currency beyond its due proportion to their cash, to guard themselves against the ruinous runs, which the rivalship of so many competitors is always ready to bring upon them”. He added that by “dividing the whole circulation into a greater number of parts, the failure of any one company, an accident which, in the course of things, must sometimes happen, becomes of less consequence to the publick.”
You’re missing one important point about the buying of shoes. It’s not that the non-wealthy buy more shoes, but in far greater numbers. A rich person may buy a pair of $150 shoes every year, but the 99-percenters who buy the $20 shoes are in the aggregate creating nearly $2,000 in demand.
We’re not done.
Wealth should not be concentrated in the hands of casinos like Citigroup.
Mansplaining is not whenever a man says something you don’t like. It is when a man explains something to a woman about women.
This is just garden variety condescension.
I’m calling it now, if Hillary wins, Jamie and a few of his good pals will be going bye bye via the Warrenator.
Translation Dimon see’s the possibility of jail time.
Oh yeah… Good catch…
That’s the first person I thought of when reading Manziel’s tripe.
~OGD~
I’m not sure what you are talking about, and it isn’t exactly about shoes, alright.
This is about the fact that rich people, by and large, spend less money than the average poor person.
If that’s your position, you’re wrong. Rich people individually spend quite a bit more than others. In the aggregate they don’t, because of their low numbers, and they spend a smaller percentage of their income in consumer goods.
Okay…answer me this- are you or someone you know wealthy? Are you or someone you know part of that “one percent?” Because, unless you speak from absolute personal experience, I can tell you that the majority of the wealthy people I have known, don’t spend as much as everyone thinks they do. Oh, they invest, they spread the money amongst themselves, but they don’t actually buy as a whole as much as people think they do.
That really needed to be a one-fingered salute to Jamie-kins et al.
I agree, “mansplaining” is a pejorative on par with “slut shaming”, and one could easily see Dimon’s same words being directed at a man. The intent is to demean the messenger in order to negate the message. Poor choice of words.
In fact, the old New England liberal Republicans were far more liberal than just about anyone left in the Democratic Party, except for Warren and Sanders.
They were. And Warren and Sanders, of course, are New Englanders themselves. My years in Vermont felt like governance heaven, right down to the town meeting level.
“Manziel” Is Jamie Dimon’s handle.
In response: 1. Yes, I do, several (most of them professional athletes, some of them businesspeople). 2. I agree that they don’t spend as much as most people think they do, but they do spend more than most people because a.) they have more money to spend and b.) that for which they spend money is more expensive. Frankly, I don’t understand why you even want to debate the point. We’re in agreement (I think) that as consumers the middle class is far more important than the wealthy, but that’s not due to their individual purchases. It’s because there are many times more consumers in the middle class which spend more in the aggregate, and will do so even more greatly as their incomes rise.
We are debating this because you are not really understanding my point.
The well off people I’ve known, especially those who have old money, yes, they do buy a lot of things, but they also tend not to buy something, wear it once, and then get rid of it. They buy stuff that lasts and wear it for a very long period of time.
They’ve also managed to convince themselves that “earning money” is the same thing as “figuring out clever ways to take other people’s money without actually giving them anything in return.” They’re absolutely sure that pickpocketing on a grand scale is a productive economic activity.