Econodopes

A new claim is that the middle class has been disappearing for 40 years. The chart "proving" this shows that the assets (undefined) of the top 1% have increase by about ½ in 40 years. The assets of the middle class have increased about 10 times. Which return do you want? So, his chart shows that the “rich” who invest get a smaller return on their wealth than the “poor”. Probably wrong there.

Second, these types of charts showing wealth over time never consider that the group in the lowest category in 1962 (whose wealth increase by a factor of 6) are not the same people as in 2001. And where did those people go? They went up into the next category to be replaced by a new low income group populated by recent graduates, immigrants etc. Same happens in all the categories. Some wealthy people stay wealth – so what but which category were Gates and Jobs families and the rest in in 1962?

This falls into the theory that if a rich guy has a dollar, it is a dollar a poor guy does not have. Fostering class warfare is not a path to economic progress. This guy supports redistribution – we are currently seeing how well that works.

It is also unclear whether his definition of “assets and liabilities” is a net and how does it account for the incredible amount of stocks held by pension funds and other investments that impact over 50% of the people in the country.

And this guy writes for a business magazine?

He identifies the cause as the globalization of markets is way too simplistic. If the cell phones and computers we all have were produced which in the USA in unionized, heavily taxed manufacturing facilities what would they cost? Could everyone afford one? They clear answer is ‘NO” and the same applies to clothes and every other thing all of us consumers buy. So we would have more jobs producing things that less people could afford to buy. Would the companies continue to produce the articles and keep paying for the jobs involved. Another No there.

The problem is that the costs of production have not kept pace with the productivity of the American worker. That can be fixed through changes in the tax laws, tort reform and work rule changes.

Hoover determined that the best way out of the Depression was to close US markets to foreign products (Look up the Smoot Harley Act) to protect US jobs. That worked really well.