Monday, September 12, 2011

HuffPo — "As Middle Class Shrinks, Products Begin To Be Tailored To Rich And Poor"

As the American economy struggles to shake off a torpor that threatens to drag the country back into recession, the gap continues to grow between the nation's richest citizens and everybody else.

The economy is in evident peril, with unemployment high, wages falling, the housing market treading water and growth so slow as to be nearly imperceptible. Yet the rich are doing just fine. Some statistics make clear the size of America's affluence disparity: As of 2010, the richest 20 percent of the U.S. population control 84 percent of the wealth. And the 400 richest Americans have a higher net worth than the full bottom 50 percent of households.

As the wealthy continue to accrue capital -- helped by policies like a low tax on profits from stock and real estate sales -- and the less well-off classes try to make do in a pitiless economic climate, corporations appear to be finally recognizing the reality of the prosperity gap, and tailoring their product lines accordingly. Manufacturers like Procter & Gamble, the household-goods giant responsible for everything from Charmin and Old Spice to Tide, are concentrating their efforts on luxury and bargain items, putting less emphasis on products aimed at the middle class, the Wall Street Journal reports....

[Emphasis added]

When are workers going to figure out that the agenda is to reduce the US wage level to that of the emerging world in order to "make America competitive" again?


Mario said...

yup. I saw this WSJ article today and posted it on facebook saying "this is not good."

Still most of the baby boomers I talk to you are all still refusing to think outside the boxes given to them by media/etc. So be it...Jedi!

GLH said...

Mr. Hickey;
I know this is off topic, but I would like for you to discuss the differences between the European Central Bank and the Fed. I ask you to do this because I've been listening to Michael Hudson and he raised several questions in my mind about central banks in general. I think he was mainly criticizing the ECU. Is is possible to have a modern economy without a central bank as some politicians have suggested?

Tom Hickey said...

GLH, the basic difference is that the US is a federal system with the Fed and Treasury being agencies of the federal government.

Although the Fed is politically independent to some extent, the Fed and Treasury cooperate to effect monetary policy and coordinate monetary and fiscal matters.

The EZ is a confederation without a fiscal counterpart to the US Treasury and a federal government that is in charge of fiscal operations. The ECB is politically independent and manages monetary policy. This leaves an enormous hole between monetary and fiscal in the EMU, which is at the bottom of the problem, along with asymmetry.

Yes, it is possible to run an economy without a central bank. All options have pros and cons.

GLH said...