An economics, investment, trading and policy blog with a focus on Modern Monetary Theory (MMT). We seek the truth, avoid the mainstream and are virulently anti-neoliberalism.
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Friday, June 4, 2021
How U.S. capitalism "lifts all boats" — Jonathan Nitzan and Shimshon Bichler
It compares wages which are a flow variable to the value of a stock market investment which is a stock variable.
Worse yet, it assumes reinvested earnings for the stock market investor but not the worker. In reality, a portion of a worker’s earnings end up being invested, if not in the stock market, then usually in real estate. A fair comparison would have included the returns for those investments also.
The graph is misleading.
ReplyDeleteIt compares wages which are a flow variable to the value of a stock market investment which is a stock variable.
Worse yet, it assumes reinvested earnings for the stock market investor but not the worker. In reality, a portion of a worker’s earnings end up being invested, if not in the stock market, then usually in real estate. A fair comparison would have included the returns for those investments also.
Apples and oranges.