Can we tackle inequality without destroying free-market capitalism? Yes. Protest Getty Coupon clippers are doing just fine in this pandemic, what with stocks and bonds back to where they were at the start of the year or slightly ahead. Low-paid workers are getting crushed.
Capitalism is a mixed blessing. The system has lifted billions of people out of poverty, but it doesn’t work particularly well for people without capital.
The past four decades have delivered quite a windfall to Americans with capital. Counting from the end of 1981, which is close to the bottoms in financial markets, a dollar put into corporate bonds has grown to $14, in stocks to $24. Those are real returns, beyond inflation.
If you started this episode with a pot of money, or you had a high-paid job that enabled you to put money aside, then you got richer. If you started out poor and spent 38 years in crappy jobs just squeaking by, then you are still poor.
Three things have combined to make the rich richer. One is that globalism has enabled them to marry their capital and their skills to cheap foreign labor. The next is that the Federal Reserve has printed a great deal […]
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