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> The only explanation I've ever seen that adequately explains those curves is inflation. Inflation drives up prices, both of goods and of assets. Actually, th
by frandroid 9y ago
> The only explanation I've ever seen that adequately explains those curves is inflation. Inflation drives up prices, both of goods and of assets.
Actually, this disparity growth has been driven by the extremist anti-inflationary policies of the Federal Reserve Bank under Alan Greenspan and his successors. Reduced of inflation allows accumulated wealth to mean more over time, whereas higher inflation puts pressure on workers to demand (and obtain) wage increases and keeps the inequality in check.
- nateabele 9y agoBut wages are sticky and tend to increase slowly, especially in blue-collar sectors where labor demand has been held at bay by automation.
- runT1ME 9y ago>Reduced of inflation allows accumulated wealth to mean more over time, whereas higher inflation puts pressure on workers to demand (and obtain) wage increases and keeps the inequality in check. You have this backwards. Inflation allows those with debt (leverage) to disproportionately capture a larger percentage of wealth. Those with more debt make out better... who do you think has more debt? Inflation is wealth transfer from the lower and middle class to the upper class.
- frandroid 9y agoExcept that when interest is 2%, you can borrow a fuckton of money with no consequences, but at 15% you're pretty limited by your ability to repay FAST. That's one of the reasons there have been so many corporate mergers, leading to massive centralization of wealth... when the interest rate is lower than the profit rate of the company you're buying, there's plenty of incentive to buy your competitors rather than trying to outdo them.
- runT1ME 9y agoIt sounds like we're agreeing? Low interest rates == more monetary supply == inflation.