A New York Times article by Louise Story asks, “Do widening gaps between rich and poor necessarily lead to financial crises?” (Aug. 21) The answer is yes, for a reason observed over 100 years ago by American economist and reformer Henry George: Economic growth enhances the value of titles to real estate and other natural resources (like broadcast spectrum). This widens the wealth gap between individual or corporate title-holders and the rest of the population. As growth progresses, overoptimistic projections of future growth widen the gap even further. Come the inevitable collapse, imaginary wealth evaporates, and the gap shrinks. Only, as pointed out by Gretchen Morgenson (“Debt’s Deadly Grip” Aug 22), this time is different. By holding short-term interest rates near zero for the big banks, the Fed is supporting the value of their toxic assets at the expense of everyone else.
- Tuesday Links: CEO Pay, Crisis Costs, Climate March, etc. September 16, 2014
- “Labor Day” Links: Rand Wilson, Steve Early, Jeannette Wicks-Lim September 1, 2014
- Thursday Links: Boots, Salaita, Kalamazoo, etc. August 28, 2014
- Friday Links: Gaza, Ferguson, Argentina, and unemployment August 22, 2014
- Wednesday Links August 13, 2014
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TagsAbby Scher Adidas Alejandro Reuss Bill Barclay Bill Black billionaires Cambridge Controversy co-ops CPEG Darwin BondGraham David Brooks David Cay Johnston Detroit Doug Henwood education education reform Fiscal Cliff Gaza Harris v. Quinn Henry George Hobby Lobby inequality interest rate swaps Israel James K. Galbraith Jason Stanley libor May Day Phil Gasper poverty prison gerrymandering private equity public schools recovery Robert Solow Ron Baiman Sarah Blaskey Steven Pressman sweatshops taxes Thomas Piketty ultra-right unions William K. Black Wolf Richter