Economics makes one assumption that is flat-out wrong, that people are rational in the economic sense. They aren’t, and have never been rational in their purchasing patterns.
The only thing a person absolutely needs to have:
Shelter, food, clothing. Nothing else.
The “toys” that people buy, are not needed, they are simply wanted. Why does anyone need a car with a 300HP engine and a top speed of 140+ mph? There is no where in this country that a person could drive that fast. It is wasteful and ignorant to purchase such a vehicle, but people buy what they WANT, not what they NEED. IMO.
It seems to me that when we are talking about the capture of politics by “Washington Establishment”, we are largely talking about it’s capture of the discussion of what adds “value” to the ecconomy.
For example, that the banking system as it currently exists is so important to the economy that it must be bailed out at taxpayer expense, but the same taxpayers are not allowed to ask exactly what sorts of actual economic “value” are being protected.
All the issues raised in this article were resolved by classical market liberals a century ago and back. This is little more than a rhetorical quest for answers in search of a problem.
over 100 years ago we used to have a depression and boom cycle every 10-5 years, and the smart people learned how to ride those cycles, the progressive era sought to control the natural cycle with dangerous results one of them being the great depression.
We are so disconnected from the real economy, one day we will be forced to commune with it once more and it won’t be pretty.
>>> Despite the setback of the Great Recession, the U.S. economy more than doubled in size during the last three decades while middle-class incomes and buying power have stagnated.... <<<
Is that what common folks call inflation? When everything costs more but income hasn’t grown in proportion...
Seriously. $4.00 for a gallon of milk?
BS. The political system is well-lubricated and running along just fine under the single-party crony-capitalist model that has taken over the 6 Million dead-soul megalopolis called Washington DC which lives in a close symbiotic relationship with that even bigger parasite, New York city.
It hums along just fine doing the bidding of those who control it. This isn't an argument about an economy at all. It is only an argument about which pigs get all four trotters in the trough.
What everyone needs to wake up to is that while this system always existed, it became hog fat through the actions of GWB who abandoned economic caution and told them all they could loot the public temples so long as he could go to war in Iraq. DHS is just the tip of the iceberg. All those godawful high-rises in the Virginia quadrant of 495 are a monument to the Bush Cheney neocon doctrine that has destroyed this country.
This new perspective also makes obvious why both the laissez-faire policies of the far right
Now we can wonder about referenced target referred to as "the far right," but as DC and NY operate today, as a result of GWB's deal with the devil to invade Iraq, we don't have anything resembling "lassez-faire" policies. We have the heaviest hand of government picking the losers who are going to get all of our money.
Sure Obama has made it far worse, but he didn't invent the whole thing. He just took advantage of it.
It’s simple. Put the taxpayers on the hook for the money let into the system for quantitative easing, and the cronies get the pie. The penny stinkers get crumbs if they are lucky.