FT.com is only free for 7 articles a month, but links don't count. Spread this like your 99% life depends on it.
A quantification of exactly what that income inequality is costing our economy. And how much it deviates from the norm.
I am respecting FT's copy right & provide the edited for brevity snippet below for the facebook summary feature for linked content. You can edit that yourself by clicking in that field, (it will turn into an input text box, where you can delete the default summary) and pasting what is below then hitting enter to save the changes. This needs to rocket around the internets for the next week at least.
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We are the 99%, the slogan of OWS, is a reference to income inequality. An equally valid slogan might be: We get 58%, the share of income that goes to workers rather than to investors. If wages were at their 63% postwar average workers would earn an extra $740bn this year, about $5,000 per worker.
I had to go through a stack of Time magazines to find this Curious Capitalist column from Aug. 2011 that perfectly points out why income inequality is the cause, not the effect, of our economic problems. Every supporter of this movement should read this, so they can better articulate why OWS is so important. to 100% of us.
The debt-reduction deal guarantees that the gap will widen, perhaps dramatically. First, it cuts government spending at a time when spending is needed most. The economy is weak, and the private sector is still hoarding its cash. This, along with the fear that we'll have to go through the same charade every few months or years, has economists downgrading their already low growth forecasts, making a reality of the much feared 2% economy one in which a few highly skilled workers prosper and the vast middle flounders. "The debacle has eroded corporate, household and investor confidence," says Mohamed El-Erian, CEO of Pimco. "It will translate into lower U.S. economic growth, higher unemployment and more volatile and fragile markets."
What's more, the particulars of the deal favor the rich, since the wealthy escape new taxes and the poor get the spending ax in the back in the form of reduced unemployment benefits, public-sector-job elimination and no increases in spending on programs that might bolster employment or help retrain workers. "It is hard to shrink the size of government right now without exacerbating inequality," says Harvard economist Ken Rogoff, co-author of This Time Is Different, a history of debt crises.
While this is depressing enough, what's really disturbing and not nearly well enough understood is that inequality is a cause, not just a symptom, of the current crisis. By legislating an increase in the wealth gap, we are actually compounding our economic woes, because those in the lower 95% of the population, which does 71% of the spending, simply aren't going to have any cash on hand, nor can they borrow. "High levels of inequality depress longer-term growth by depressing more broad-based consumption. You end up with a lot going on at Walmart and Nordstrom without enough going on in the middle," notes Jared Bernstein, a senior fellow at the Center on Budget and Policy Priorities. You also end up with curtailed retail-employment growth, which will ensure that unemployment, at record highs for this stage of a "recovery," will inch higher.
What's interesting is that if we had done more to prevent inequality, we might not have ended up where we are.
Read more: http://www.time.com/time/magazine/article/0,9171,2086853,00.html#ixzz1gLCGHIgb