Income Inequality And Wage Stagnation
. . . I should say that I don’t buy the idea that inequality and stagnant wages, bad as they are, are responsible for the financial mess. You can have a fully employed economy producing disgusting luxury goods rather than middle-class necessities; it’s not nice, but it can work.
Perhaps that is true regarding the financial crisis, but is it true regarding our economic crisis? In the modern American economy, as Krugman himself notes, consumption is 70% of GDP. Even if the long term goal is to increase savings (also known by economists as "investment"), in the short term, can we have an sustainable economic recovery that does not cut income inequality and reverse wage stagnation? More . . .
|< It's Cold Outside, Don't Forget to Give | Report: Iraq Criminal Justice System Failures >|