“The aftermaths of the Great Recession and the Great Depression produced sharply different changes in U.S. incomes that tell us a lot about tax and economic policy. In 2010, we saw the opposite as the vast majority lost ground. The different results in 1934 and 2010 show how a major shift in federal policy hurts the vast majority and benefits the super-rich.
“We should expect this pattern of concentrated gains weighted toward the very top to continue unless we change our policies.”
This is an excellent article written by David Cay Johnston at Reuters.com.
The government led the way out of the Great Depression with investment, which resulted in a growth economy and better paying jobs. Today’s world is much different, with exponentially productive capital growth. Private sector job creation in numbers that match the pool of people willing and able to work is constantly being eroded by physical productive capital’s ever increasing role. Over the past century there has been an ever-accelerating shift to productive capital––which reflects tectonic shifts in the technologies of production. The mixture of labor worker input and capital worker input has been rapidly changing at an exponential rate of increase for over 235 years in step with the Industrial Revolution (starting in 1776) and had even been changing long before that with man’s discovery of the first tools, but at a much slower rate. Up until the close of the nineteenth century, the United States remained a working democracy, with the production of products and services dependent on labor worker input. When the American Industrial Revolution began and subsequent technological advance amplified the productive power of non-human capital, plutocratic finance channeled its ownership into fewer and fewer hands, as we continue to witness today with government by the wealthy evidenced at all levels.
The solution is investment with the requirement that productive capital ownership be broadened, so that ALL Americans, can over time build a viable capital estate and earn income through their capital worker contribution as well as their labor worker contribution, as the rich minority does now and has always done.
This is a message that needs to become a part of the national discussion with the result that people will come forth with specific policies and programs to achieve the goal of broadening productive capital ownership simultaneously with the growth of the economy. I and others have advocated using insured credit loans with payback out of the earnings of the future new capital formation investments. Perhaps President Obama should be urged to create a Capital Ownership Commission to study the problem and hear and discuss testimony on solutions.