America's Wealth Gap 'Unsustainable' According To Harvard Study

[hazlnut]

America's Wealth Gap 'Unsustainable' According To Harvard Study

The study, titled "An Economy Doing Half its Job", said American companies - particularly big ones - were showing some signs of recovering their competitive edge on the world stage since the financial crisis, but that workers would likely keep struggling to demand better pay and benefits.

"We argue that such a divergence is unsustainable," according to the report, which was based on a survey of 1,947 of Harvard Business School alumni around the globe, and which highlighted problems with the U.S. education system, transport infrastructure, and the effectiveness of the political system.

Also, from Harvard Magazine --

AMERICANS HAVE A DISTORTED sense of the level of inequality in their society—but not in the direction one might expect. Associate professor of business Michael I. Norton has found that respondents to his surveys universally think that wealth is more evenly distributed in the United States than it actually is—and what’s more, respondents say they would prefer for the wealth to bestill more evenly spread around.


The lowest two quintiles (a group with average net worth of $2,200) control 0.2 percent and 0.1 percent of the wealth, respectively. But respondents estimated that these groups held 6 percent and 3 percent, respectively, and said they would like them hold about 15 percent and about 10 percent instead.

A little history lesson:

Marriner S. Eccles, who served as Franklin D. Roosevelt's Chairman of the Federal Reserve from November 1934 to February 1948, detailed what he believed caused the Depression in his memoirs, Beckoning Frontiers (New York, Alfred A. Knopf, 1951).

As mass production has to be accompanied by mass consumption, mass consumption, in turn, implies a distribution of wealth -- not of existing wealth, but of wealth as it is currently produced -- to provide men with buying power equal to the amount of goods and services offered by the nation's economic machinery.[Emphasis in original.]

Instead of achieving that kind of distribution, a giant suction pump had by 1929-30 drawn into a few hands an increasing portion of currently produced wealth. This served them as capital accumulations. But by taking purchasing power out of the hands of mass consumers, the savers denied to themselves the kind of effective demand for their products that would justify a reinvestment of their capital accumulations in new plants. In consequence, as in a poker game where the chips were concentrated in fewer and fewer hands, the other fellows could stay in the game only by borrowing. When their credit ran out, the game stopped.

That is what happened to us in the twenties. We sustained high levels of employment in that period with the aid of an exceptional expansion of debt outside of the banking system. This debt was provided by the large growth of business savings as well as savings by individuals, particularly in the upper-income groups where taxes were relatively low. Private debt outside of the banking system increased about fifty per cent. This debt, which was at high interest rates, largely took the form of mortgage debt on housing, office, and hotel structures, consumer installment debt, brokers' loans, and foreign debt. The stimulation to spend by debt-creation of this sort was short-lived and could not be counted on to sustain high levels of employment for long periods of time. Had there been a better distribution of the current income from the national product -- in other words, had there been less savings by business and the higher-income groups and more income in the lower groups -- we should have had far greater stability in our economy. Had the six billion dollars, for instance, that were loaned by corporations and wealthy individuals for stock-market speculation been distributed to the public as lower prices or higher wages and with less profits to the corporations and the well-to-do, it would have prevented or greatly moderated the economic collapse that began at the end of 1929.

The time came when there were no more poker chips to be loaned on credit. Debtors thereupon were forced to curtail their consumption in an effort to create a margin that could be applied to the reduction of outstanding debts. This naturally reduced the demand for goods of all kinds and brought on what seemed to be overproduction, but was in reality underconsumption when judged in terms of the real world instead of the money world. This, in turn, brought about a fall in prices and employment.

Unemployment further decreased the consumption of goods, which further increased unemployment, thus closing the circle in a continuing decline of prices. Earnings began to disappear, requiring economies of all kinds in the wages, salaries, and time of those employed. And thus again the vicious circle of deflation was closed until one third of the entire working population was unemployed, with our national income reduced by fifty per cent, and with the aggregate debt burden greater than ever before, not in dollars, but measured by current values and income that represented the ability to pay. Fixed charges, such as taxes, railroad and other utility rates, insurance and interest charges, clung close to the 1929 level and required such a portion of the national income to meet them that the amount left for consumption of goods was not sufficient to support the population.

This then, was my reading of what brought on the depression.

I am disappointed in Obama for a completely different reason -- he hasn't raised taxes on the wealthy and closed loopholes.

The Fox talking point about raising taxes hurting growth is bullshit-- most of those nitwits long for the wholesome all-american 1950's...

when the top marginal tax rate was 91%...

 

[Rikurzhen]

America's Wealth Gap 'Unsustainable' According To Harvard Study

The study, titled "An Economy Doing Half its Job", said American companies - particularly big ones - were showing some signs of recovering their competitive edge on the world stage since the financial crisis, but that workers would likely keep struggling to demand better pay and benefits.

"We argue that such a divergence is unsustainable," according to the report, which was based on a survey of 1,947 of Harvard Business School alumni around the globe, and which highlighted problems with the U.S. education system, transport infrastructure, and the effectiveness of the political system.

And yet we see no effort from Democrats to deport 20 million illegal infiltrators and thus create LABOR SCARCITY in the labor market, thus IMPROVING the ability of workers to demand better pay and benefits.

Look, the study identifies the root cause of the problem - lack of bargaining power - so why do Democrats fix their solutions on higher taxes AFTER the gains have been allocated and then redistribution? Those are two massively inefficient tools to fix the problem. You fix the problem at the source, not far downstream of the source.[/QUOTE]

 

[francoHFW]

Well, O didn't want to do it while the economy was in freefall, and Pubs have blocked it ever since. Reaganism has killed the nonrich. see sig.

 

[francoHFW]

It's 12 million illegals, and we don't want most of those jobs. The dupes love those crummy job workers, except during Pub depressions...

 

[francoHFW]

Pubs refuse to pass a good SS/ID- just love those cheap, easily bullied workers...distract the dupes with useless fences and unconstitutional harassment laws...

America s wealth gap unsustainable may worsen Harvard study - Yahoo News

 

[TooTall]

America's Wealth Gap 'Unsustainable' According To Harvard Study

The study, titled "An Economy Doing Half its Job", said American companies - particularly big ones - were showing some signs of recovering their competitive edge on the world stage since the financial crisis, but that workers would likely keep struggling to demand better pay and benefits.

"We argue that such a divergence is unsustainable," according to the report, which was based on a survey of 1,947 of Harvard Business School alumni around the globe, and which highlighted problems with the U.S. education system, transport infrastructure, and the effectiveness of the political system.

And yet we see no effort from Democrats to deport 20 million illegal infiltrators and thus create LABOR SCARCITY in the labor market, thus IMPROVING the ability of workers to demand better pay and benefits.

Look, the study identifies the root cause of the problem - lack of bargaining power - so why do Democrats fix their solutions on higher taxes AFTER the gains have been allocated and then redistribution? Those are two massively inefficient tools to fix the problem. You fix the problem at the source, not far downstream of the source.

[/QUOTE]

The vast majority of the relatives of those '20 million illegal infiltrators' vote for Democrats. Next question.

 

[francoHFW]

ONLY because the Pubs and hater dupes in the GOP get them here and then mess with them...

 

[Rikurzhen]

It's 12 million illegals, and we don't want most of those jobs. The dupes love those crummy job workers, except during Pub depressions...

Every single job category in which infiltrators have found work also has American citizens doing the same job, so bullshit on your claim that Americans don't want to be roofers or meatcutters.

 

[deltex1]

http://online.wsj.com/articles/harvard-gets-largest-ever-donation-1410148865


Maybe they should donate it to the food stamp program...

 

[The Rabbi]

Reduce income inequality!
Vote Republican!

 

[Moonglow]

 

[hazlnut]

America's Wealth Gap 'Unsustainable' According To Harvard Study

The study, titled "An Economy Doing Half its Job", said American companies - particularly big ones - were showing some signs of recovering their competitive edge on the world stage since the financial crisis, but that workers would likely keep struggling to demand better pay and benefits.

"We argue that such a divergence is unsustainable," according to the report, which was based on a survey of 1,947 of Harvard Business School alumni around the globe, and which highlighted problems with the U.S. education system, transport infrastructure, and the effectiveness of the political system.

And yet we see no effort from Democrats to deport 20 million illegal infiltrators and thus create LABOR SCARCITY in the labor market, thus IMPROVING the ability of workers to demand better pay and benefits.

Look, the study identifies the root cause of the problem - lack of bargaining power - so why do Democrats fix their solutions on higher taxes AFTER the gains have been allocated and then redistribution? Those are two massively inefficient tools to fix the problem. You fix the problem at the source, not far downstream of the source.

The vast majority of the relatives of those '20 million illegal infiltrators' vote for Democrats. Next question.[/QUOTE]

What was the first question?

Their relatives live in Central America. Can't vote from there. Next.

 

[Skull Pilot]

Here we go again pining of the good old days of the 90% tax bracket.

Let me remind you that when the top rate was 90% the lowest rate was something like 22% and people making 40K a year were in the 50% bracket. There were also none of the giveaways there are now so be careful what you wish for.