h****r
发帖数: 2056 | 1 Even though he is a Democrat (and a scumbag) John Edwards was absolutely
right when he ran for President in 2004 and talked about two Americas. There
is a group of people who have assets --- not just financial (education, job
security, political connections, family/friends with connections, self-
discipline, strong work ethic) --- that allow them to weather difficult
times, get second/third/fourth chances if they fail, etc. Then there is
another class of Americans who are living paycheck to paycheck, with
marginal skills, limited financial resources and weak social connections (in
the literature, this is called “social capital” and a number of studies
have found this to be more important than financial capital).
The data indicates in growing divergence in the opportunities and outcomes
of these groups. Specifically, wage stagnation and atrophy of skills in the
latter and more economic rents to the former. One of the best analyses was
the one that wage growth and spending increased throughout the 1990s.
However, in the early 2000s, wage growth for the lower 60% of earners
stagnated, but standard of living for all groups kept increasing --- fueled
by borrowing. As Warren Buffett has stated: you only know who has been
swimming naked when the tide rolls out --- and from 2007 onward, we have
seen who is underwater on homes, overextended on credit, etc. --- and it is
the bottom 60%.
However, the culture bred by the standard of living increases for all groups
still remains, which is why the government is essentially providing
handouts to the bottom 50% of all taxpayers. Specifically, the top 50% of
taxpayers pay 96% of all income taxes --- half the people pay for all the
government.
I would challenge anyone to go through their monthly budget and find items
that are not provided by the government to some Americans: housing (Section
8, HAMP, mortgage tax deduction, public housing), health care (Medicare/
Medicaid), transportation (cash for clunkers, transportation subsidies),
food and staples (44 million people on food stamps, school breakfast/lunches
/dinners), education (Pell grants, student loans). As the food stamp numbers
indicate --- this is not the bottom 5% of the population who are down on
their luck for a period of time --- the handouts are deep, consistent and
systemic.
The Fed and government cannot risk upsetting this apple cart because the
bankers are going great, employment is going down and QE allows for low
interest rates. Thus, the government can keep borrowing to support the
welfare state (keeping voters happy), the Fed supplies the money for free to
banks to buy the bonds and the bankers get rich on the spread between the
Fed funds rate (0%) and the yield on treasuries. Win-win-win. This game can
continue until the bankers stop buying treasuries or unleash the money into
the economy. I wish we would just save the vigorish paid to banks on bond
yields and have the Fed buy directly from Treasury and change our name to
the U. S. of Argentina (or Zimbabwe).
For those interested in the topic, here is a good overview of inequality: http://www.project-syndicate.org/comment... |
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