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Why ignore the elephant in the room? The U.S. is more unequal than it has been since before WWII [1], and that is a big reason why its growth is stagnating.[2]

Why ignore the elephant in the room? The U.S. is more unequal than it has been since before WWII [1], and that is a big reason why its growth is stagnating.[2] It's time to stop taking seriously any analyses that do not address this. [1] http://www.epi.org/publication/income-inequality-by-state-1917-to-2012/#_note1 http://www.epi.org/publication/income-inequality-by-state-19... [2] http://www.washingtonpost.com/business/economy/income-inequality-hurts-economic-growth-researchers-say/2014/01/24/cb6e02a0-83b0-11e3-9dd4-e7278db80d86_story.html http://www.washingtonpost.com/business/economy/income-inequa...

cryoshon 12y ago
It's inconvenient to discuss inequality if you are a VC in SV... let's be honest, it's their game to win, and the losses won't hurt them that badly anyway. It's more comforting to rely on the "didn't work as hard as me and therefore don't deserve as much cash" line. Wage growth has been stagnant since the 70s, and a working wage is all the vast majority of people can expect as a way of gaining money. Additionally, there is an important distinction here: VCs deal in wealth with income being derived from that wealth, and normal people deal in income, with wealth being derived from that income. VCs get dividends from their stocks. Normal people save up to buy a house, or put money into a retirement account.
drt1245 12y ago
https://www.google.com/search?q=china+income+inequality https://www.google.com/search?q=china+income+inequality If that was the case, China's growth would be stagnating as well. Not everything is caused by income inequality.
- marcusgarvey 12y ago
  Not necessarily. 70% of the U.S. economy is based on consumer spending, meaning the disposable income has to be there in the first place. China's economy is not structured this way.
- adventured 12y ago
  China's growth is stagnate. That's why they needed tens of trillions in new debt since the great recession to juice the GDP numbers. Subtract out the $30 trillion in new debt, throw in the real inflation rate (like many governments, China lies about their real inflation rate), you get economic contraction. That means the only difference between their fake growth today, and the horrific outcome on the way, is a little bit of time and tens of trillions in additional debt that will never be repaid.
rrggrr 12y ago
The US is unequal largely because the US exported millions of blue collar jobs to Asia but did not proportionally increase incentives to create jobs for those displaced. This only affected the middle class as the highest earners benefited or were untouched by the job exports. The US then created huge incentives for "investment" in home purchases and other real-estate, creating a spectacular bubble that worsened inequality all the more when it burst. That did impact higher earners. Everyone is worse off. So, it must be the case that now Congress and the President are working together to make job creation, manufacturing and competitiveness a priority, right? Not so much. New manufacturing innovation centers appear to be patronage boondoggles. While billions went to bank bailouts, the Small Business Administration saw no significant increase. Taxes actually increased for employment, and the US healthcare law has made health insurance more (not less) expensive for many employers.
CamperBob2 12y ago
Because the size of somebody else's bank account is of very little concern to me?
CamperBob2 12y ago
Because the size of somebody else's bank account is of very little concern to me?

cryoshon 12y ago

It's inconvenient to discuss inequality if you are a VC in SV... let's be honest, it's their game to win, and the losses won't hurt them that badly anyway. It's more comforting to rely on the "didn't work as hard as me and therefore don't deserve as much cash" line. Wage growth has been stagnant since the 70s, and a working wage is all the vast majority of people can expect as a way of gaining money. Additionally, there is an important distinction here: VCs deal in wealth with income being derived from that wealth, and normal people deal in income, with wealth being derived from that income. VCs get dividends from their stocks. Normal people save up to buy a house, or put money into a retirement account.

drt1245 12y ago

https://www.google.com/search?q=china+income+inequality https://www.google.com/search?q=china+income+inequality If that was the case, China's growth would be stagnating as well. Not everything is caused by income inequality.

marcusgarvey 12y ago
Not necessarily. 70% of the U.S. economy is based on consumer spending, meaning the disposable income has to be there in the first place. China's economy is not structured this way.
adventured 12y ago
China's growth is stagnate. That's why they needed tens of trillions in new debt since the great recession to juice the GDP numbers. Subtract out the $30 trillion in new debt, throw in the real inflation rate (like many governments, China lies about their real inflation rate), you get economic contraction. That means the only difference between their fake growth today, and the horrific outcome on the way, is a little bit of time and tens of trillions in additional debt that will never be repaid.

rrggrr 12y ago

The US is unequal largely because the US exported millions of blue collar jobs to Asia but did not proportionally increase incentives to create jobs for those displaced. This only affected the middle class as the highest earners benefited or were untouched by the job exports. The US then created huge incentives for "investment" in home purchases and other real-estate, creating a spectacular bubble that worsened inequality all the more when it burst. That did impact higher earners. Everyone is worse off. So, it must be the case that now Congress and the President are working together to make job creation, manufacturing and competitiveness a priority, right? Not so much. New manufacturing innovation centers appear to be patronage boondoggles. While billions went to bank bailouts, the Small Business Administration saw no significant increase. Taxes actually increased for employment, and the US healthcare law has made health insurance more (not less) expensive for many employers.

CamperBob2 12y ago

Because the size of somebody else's bank account is of very little concern to me?

CamperBob2 12y ago

Because the size of somebody else's bank account is of very little concern to me?