Archive

Tag Archives: economic inequality

An emerging critique of U.S. President Barak Obama’s record is the idea that Americans are not better off than they were four years ago. A quick caveat – it seems that Republicans are speaking primarily to “average”, i.e. middle class, Americans here. Paul Ryan, the Republican nominee for the Vice Presidency, has forcefully adopted this critique of Obama, suggesting that his record should be judged based on whether  Obama’s policies have improved the lives of Americans. In a campaign stop on September 3rd, Ryan went as far as to suggest that Jimmy Carter’s Presidency, much derided by the right, seems like the “good ‘ole days” compared to Obama’s:


This reference is more than just a slant at President Carter. It is a reference to then candidate Reagan’s campaign against Carter in 1980, when he famously asked Americans whether they were better off or not than they were when Carter began his term.


What these arguments miss, however, are the fundamental changes these so-called “average” Americans have experienced over a much longer period.

Read More

Last week I discussed the connection between the Occupy Wall Street protests and the long-term transfer of national income into the finance sector. Well the problem is worse than Wall Street’s power over the national economy and polity.

There really are two faces to financialization. The most familiar face is the dominance of the finance sector over the rest of us: the giant profits and bonuses at the big banks and investment houses and the instability generated by too big to fail but rapaciously imprudent financial services firms. The other face is the financialization of the rest of the economy. Greta Krippner figured this out first. Greta discovered that since the 1980s firms in the non-finance sector have increasingly invested, not in the production of goods and services, but in financial instruments. The productive economy, Main Street in some formulations, has increasingly abandoned production in favor of financial shenanigans. Finance related income, including interest, foreign exchange profits, and stock market investments have risen from about 1/8th of corporate profits to around 30%. In the manufacturing sector the move from production to financial strategies has been even more dramatic, rising to a ratio of finance revenue/profit as high as .60 after 2000.

Read More