itfitzme
VIP Member
The forum title is "Is Income Inequality Leading To A Crisis For Capitalism?" Finally, a post of on target intelligence.
You win the grand prize of answering the question.
And it is obvious from reasonable deduction. The compression and decrease of median income has resulted in a complete loss of savings, the increased use of revolving credit to meet basic consumption, and the loss of home owner equity from both paying off credit cards and the collapse of the housing market.
It is now February of 2012. The recession began in December of 2007, four years ago. It bottomed in June of 2008, three and a half years ago. It has bumped along the bottom at an unemployment rate of above 8% for two years.
Home equity is the fundamental capital in capitalism. Small and major businesses in American, during the peak of capitalism, were funded by home ownership. Hard working middle class Americans, recognizing opportunities of all sorts, funded their start up by taking on a second mortgage. Hewlett Packard began in a garage.
In the context of today's economy, there is no capitalism. In today's language, it is American Corporatism. The dominance of a few major national and global oligopolies in every major market has destroyed capitalism in America and the western world.
At the same time, the erosion of income has killed the major economy of the consumer market. The turning point was apparent when HDTV and Blue Ray hit the market. The previous decade of technological improvement moved like lighting. Then the consumer market collapsed. Now, Blue Ray disks sit side by side on the shelves at Block Buster. A decade ago, DVDs did not sit side by side with VCR tapes. Two decades ago, CD's did not sit side by side with records. No sooner did the new technology hit the market that the old technology was washed away by the incoming tide.
Income inequality is not leading to crisis in capitalism. It has already happened.
We surely must realize that we are always behind in our perception of economic conditions. Many economic indicators lag by three months. Indicators that are generated monthly or daily are to volatile to provide a gauge of direction. It takes months for a trend to become apparent. We are always behind in our perception, like a truck driver with a blackened windshield, driving by watching the road in the rear view mirror and watching the road disappear behind him.
The fear of "borrowing from our future" is here already. But the effect isn't what most people imagined. We did not borrow future consumption. We did not borrow future production. The effect is entirely monetary. It is the accumulation of a seventy year systematic imbalance in the underlying process of how our economic system functions. And the end result is that the money, the life blood of the economy, that accounts for the flow of goods and for which goods cannot flow is in a drought. The edge of the river is now walking distance from where the water's edge once met the grassy bank.
The economy has now wound down to it's bare minimum. Growth is not sustainable, even to keep up with the increasing population. The only entrepreneur in the neighborhood around my home in the immigrant who has taken his skills, born of a second world economy, and pushes a cart full of tamales. He is a capitalist and his capital is his cart. But the capitalism of America, the capitalism of 60s and 70s is gone. It disappeared, not with a bang, but slowly dried up and withered away. It simply died of thirst a decade ago and no one noticed. The recession of 2007 was it's last dying gasp.
