Lars P. Syll — Listen to Larry, Greg!

Even though the interest may not be reciprocated, it would obviously be a good idea for Greg Mankiw to listen to his Harvard colleague Lawrence Summers, instead of trivializing the problems created by increasing inequality! Summers has some interesting thoughts on why income inequality is on the rise and what to do about it...

Listen to Larry, Greg!
Lars P. Syll | Professor of Social Studies and Associate Professor of Economics, Malmo University

Larry is OK on diagnosis, certainly a lot better than Greg. But solutions? Pretty thin stuff that ignores the fundamental issue in the rise of inequality, which is the relationship of political power to economic policy. The wealthy are rising in fortune since, as Senator Durbin famously said of Congress, "The banks run the place."

Summers: "With smaller families and ever more bifurcation in the investment opportunities open to those with wealth, there is a real risk that the old notion of “shirtsleeves to shirtsleeves in three generations” will become obsolete, and those with wealth will endow dynasties."

The major thrust of the wealthy and power is to create dynasties. That's the bottom line. The direction of power is toward control by the powerful and in a pluralistic environment that results in feudalism of sort or another and feudalism needs an environment of fascism to survive and prosper. It is now accident that the US is deeply enmeshed in corporatism and is becoming a corporate state, with political authority supporting it due to state capture.