Money changes everything
Kevin Drum tells some very serious people are becoming concerned about income inequality.
This argument follows a simple causal chain: unequal growth concentrates wealth in the hands of a tiny slice of consumers who can only spend so much money. In turn, the vast majority of earners are left with little extra cash for goods and services. Resulting weak demand undermines growth. Low growth makes everyone poorer than they otherwise might be, including those who own the means of production. Inequality produces other bad economic outcomes, too, such as the underutilization of the nation's human capital, inadequate public investment in both human and physical capital, and social ills that are costly to address, diverting away resources from investment.Of course, us unserious hippies and some shrill professional pundits have been saying this for years but nobody listened to us. Nonetheless, good to see the VSPs finally acknowleging what has been painfully obvious (emphasis on the pain) to most of America for far too long. [graphic via Progress Illinois]