“In the 1920s, the wide disparity of wealth between the rich and the average wage earner increased the vulnerability of the economy. For an economy to function with stability on a macro scale, total demand needs to equal total supply. Disparity of income eventually will result in demand deficiency, causing over supply. The extension of credit to consumers can extend the supply/demand imbalance but if credit is extended beyond the ability of income to sustain, a debt bubble will result that will inevitably burst with economic pain that can only be relieved by inflation.....More investment normally increases productivity. However, if the rewards of the increased productivity are not distributed fairly to workers, production will soon outpace demand. The search for high returns in a low demand market will lead to consumer debt bubbles with wide-spread speculation....Today, outstanding consumer credit besides home mortgages adds up to about $14 trillion, about the same as the annual GDP. ”
“A 2002 study released by Citizens for Tax Justice and the Children's Defense Fund reveals that under the Bush tax cut, over the next 10 years, the top 1% income recipients are slated to receive tax cuts totaling almost half a trillion dollars. The $477 billion in tax breaks the Bush administration has targeted to this elite group will average $342,000 each over the decade. By 2010, when (and if) the Bush tax reductions are fully in place, an astonishing 52% of the total tax cuts will go to the richest 1% whose average 2010 income will be $1.5 million.” And, this; “In 2006, the chief executives of the 500 biggest US companies averaged $15.2 million in total annual compensation, according to Forbes business magazine’s annual executive pay survey. The top eight CEOs on the Forbes list each pocketed over $100 million.” “A Panic-stricken Federal Reserve; The shape of US Populism” Henry C. K. Liu, Asia Times)
“By virtually any measure, the United States is the least progressive nation in the developed world. It trails most of Western Europe in poverty rates, life expectancy, health care, child care, infant mortality, maternity leaves, paid vacations, public infrastructure, incarceration rates, and environmental laws. The wealth gap in the US has not been so wide since 1929. The Wal-Mart founders' family owns as much as the bottom 120 million Americans combined. Contrary to received opinion, there is now less social mobility in the US than in Canada, France, Germany, and most Scandinavian countries. The European Union attracts more foreign students than the US, including twice as many from China. Its consensus-driven polity, studies indicate, has replaced the American version as the societal model to which the developing world aspires.”
Bernard Chazelle “Saving the American Left; A New Progressive Creed”:
“Free enterprise under today's
financial conditions threatens to bring about an unprecedented centralization of
planning, not in the hands of government but by the financial conglomerates and
money managers. Whatever government planning power is destroyed becomes
available for them to appropriate, with plenty of vigorish left for the
politicians whose campaigns they back and who will "descend from heaven" into
high-paying private-sector jobs, Japanese style, after having performed their
service for the new regime.
Michael Hudson Counterpunch article 2003
“The Coming Financial Reality”: