The insiders acknowledge economic shortcomings, but never acknowledge the many economic problems caused by insider domination of both economies and government. Not surprisingly, their proposed solutions will do nothing to cure what ails the economy. From M.N. Gordon at economicprism.com:
The International Monetary Fund reported an unpleasant outlook for the U.S. economy on Wednesday. The IMF, as part of its annual review, believes the U.S. economic model isn’t working as well as it could to generate shared income growth.
On the same day, in an unrelated interview on PBS Newshour, billionaire investor Warren Buffett offered a similar outlook:
“The real problem, in my view, is — this has been — the prosperity has been unbelievable for the extremely rich people.
“If you go to 1982, when Forbes put on their first 400 list, those people had [a total of] $93 billion. They now have $2.4 trillion, [a multiple of] 25 for one. This has been a prosperity that’s been disproportionately rewarding to the people on top.”
No doubt, U.S. wealth has become exceedingly concentrated into a very small number of hands over the last 40 years. At the same time the middle class has been hollowed out into a shell of its former self. Wages have stagnated. Well-paying jobs that could support a family on a single income have disappeared.
On the other hand, asset prices, like stocks and real estate, have gone sky high. These increases in asset price have served to magnify wealth at the upper end of the wealth spectrum while pricing out everyone else, particularly millennials with entry level incomes and massive student loan debt.
Certainly, asset prices will again crash like in 2000-02 and 2007-09. But this won’t do anything to balance out middle class incomes. What to do about it?
Both the IMF and Buffett offer several recommendations…
Insider Claims to the Pie
The clever fellows at the IMF identified with careful detail and delicate precision how to go about fixing the U.S. economy to “ensure a broad-based improvement in living standards.” Their recommendations even include the “need to incorporate reforms on multiple, macro-critical fronts.”
We’re not quite sure what that all means. Yet, fortunately, the IMF dumbed it down for us into a single sentence synopsis of what’s needed to improve living standards across the income spectrum:
“[B]uilding a more efficient tax system, improving education and developing skills, reprioritizing federal spending, improving the effectiveness of the regulatory system, and reforming the immigration and welfare systems.”
Piece of cake, right? A splash of this. A dash of that. Before you can say Jack Robinson the policy makers have mixed up just the right policy elixir. Higher living standards for all are attainable in our time.
To continue reading: Work is for Idiots