One thing to understand here is that income equality is a Marxist ideal. It's stupid. What happens in a free market is that usually employers have to pay more for valuable labor than they do for labor that's worth less. That's a good thing. Only a Marxist would demand that labor that's worth less be purchased at the same prices as high value labor. The other thing is that leftist or not, this article draws its Marxist conclusions using stupid reasoning.
Inflation is the cause of income inequality in this country...
Look, inflation means wages rise for the oppressed proletariat the same amount as they do for the elite ruling class that exploits them. Of course we're a long way from agreeing that making everyone's income the same is a good thing just like we don't agree that America's been hit with run away hyperinflation with money having no value.
Fair enough. I meant to refer to widening income disparities [if you'll accept that distinction].
What happens in a free market is that usually employers have to pay more for valuable labor than they do for labor that's worth less. That's a good thing.
Yes. Absolutely. What I see, though, is explosive growth in the financial sector since the eighties. During that time period, we also see an incredible increase in the pay of financial sector participants.
The financial sector of the American economy has grown all out of proportion to the rest. That is a direct result of the Fed's half-century long policy of inflating the dollar. That has made playing games with money more profitable [in the shorter term] than producing tangible goods for consumption.
Since the bankers get the newly-printed money the Fed cranks out before the rest of us, they are able to invest it at its current level of purchasing power. By the time those dollars "trickle down" to the rest of us -- as they eventually do -- they are worth much less.
It's the Cantillon Effect. Inflating the money supply affects people and prices differently at different times. I have come to believe strongly that whatever "income inequality" exists in the U.S. is not due to nasty capitalism, but to the very government policies that control our money.