Political polarization has never been worse...and it may be driving inequality.

[Spungo]

If you're talking about REAL wages, you realize that those are AFTER inflation is factored in? If you're talking about gross wages (which I'm not sure is the case), then yes, you're correct.

I mean nominal wages. People who were making $15/h in 2010 are still making $15/h, but the cost of living has risen quite a bit during that time.

I think minimum wage is always an interesting topic. People want to raise the minimum wage to $10 or $12, but nobody stops to ask why it needs to be so high in nominal terms. Why has our money been destroyed to the point where you actually need $10/h just to survive? There was a time when our money was actually worth something. Here's a graph of gold prices during the 1970s. You can see our money was devalued by 90%:

It went from $35/oz (the official gold peg until 1971) to a peak near $700 then finished the decade at $400.
Maybe that was just one commodity. What was oil doing during that time? The same thing:

It looks like it starts around $0 in 1970 (??), but it goes up to about $35 in 1980, and apparently Iraq was spelled with a K at the time. That's still about a 90% devaluation.

Real wages (and labor participation) have been falling since 2001, and you can see on the oil graph that 2001-2014 is eerily similar to the 1970s. Real wages are continually going down as the currency is destroyed.

 

[realibrad]

Most of the current inequality you see, has to do with the fed pumping out money which goes to the finance section for investments. Those investments are mainly going to the upper class. The inflation caused by this is what has been eating away at the middle and below. It breaks down to a tax on the middle class and below, to fund the investments at the top.

 

[shira]

A simple improvement: When a public corporation decides to pay dividends and executive bonuses, non-executive employees must be paid bonuses in in some fixed relationships to those bonuses and dividends. For example, if the company decides to pay X as dividends and executive bonuses, then at least some factor of X (defined by the government) must be paid as non-executive bonuses.

And, yes, this would still allow companies flexibility to make capital expenditures and investments in R&D. And companies would still have the flexibility to award pay lower or higher dividends and executive bonuses. But if the company is making huge profits and decides to "share the wealth," then non-executive employees must get their share.

Edit: Include executive stock awards in the formula as well.

 

[Jhhnn]

A simple improvement: When a public corporation decides to pay dividends and executive bonuses, non-executive employees must be paid bonuses in in some fixed relationships to those bonuses and dividends. For example, if the company decides to pay X as dividends and executive bonuses, then at least some factor of X (defined by the government) must be paid as non-executive bonuses.

And, yes, this would still allow companies flexibility to make capital expenditures and investments in R&D. And companies would still have the flexibility to award pay lower or higher dividends and executive bonuses. But if the company is making huge profits and decides to "share the wealth," then non-executive employees must get their share.

Edit: Include executive stock awards in the formula as well.

That's not Freedumb!

 

[realibrad]

A simple improvement: When a public corporation decides to pay dividends and executive bonuses, non-executive employees must be paid bonuses in in some fixed relationships to those bonuses and dividends. For example, if the company decides to pay X as dividends and executive bonuses, then at least some factor of X (defined by the government) must be paid as non-executive bonuses.

And, yes, this would still allow companies flexibility to make capital expenditures and investments in R&D. And companies would still have the flexibility to award pay lower or higher dividends and executive bonuses. But if the company is making huge profits and decides to "share the wealth," then non-executive employees must get their share.

Edit: Include executive stock awards in the formula as well.

All you will do is make payments further hidden. The problem stems from the benefits given to the rich as incorporated into law. The rich get far more breaks from the government when it comes to investments. Target the things that are likely to give you the biggest returns.

 

[Attic]

The same right wing power agenda drives both, like a team of horses. The polarization is just a way to get people to blame somebody other than the perps & their ideology for the state of the economy.

Class warfare? They're waging & winning it because they're allowed to frame the issues while evoking emotional response among their followers. They keep it frothy for a reason, turn people's best qualities against them in the process. They've shaped America's consciousness for nearly 40 years through their well financed institutes, think tanks & media outlets.

How did we get here? We followed their lead. We trusted in the "values" they project, believing in their good intentions. It's foolish to pretend that we didn't, or that they're capable of anything other than more of the same. Their ideology hasn't failed them at all, but it has failed the American People.

That's well said, though I'm not seeing it as a result of "right", but rather something both sides have somehow managed to create under the noses of everyone.

One example, Clinton and NAFTA was a disaster for the American worker, but Bush was spot on the same as Clinton on this. Either left or right wins, same shit hits the people.

Not to get off track, but third party is best answer/solution/start I'm aware of.

 

[Attic]

Most of the current inequality you see, has to do with the fed pumping out money which goes to the finance section for investments. Those investments are mainly going to the upper class. The inflation caused by this is what has been eating away at the middle and below. It breaks down to a tax on the middle class and below, to fund the investments at the top.

There is a meaningful lag (years) in what occurs from Fed policy. So they give out easy/cheap money to Big Banks and big banks can buy up assets that are not yet inflated (homes/equities/other). If that easy money ever reaches middle class then middle class is forced to buy up (homes/equities/other), but by that time those assets are inflated. So the inflated assets benefit the rich at the expense of the middle class, due to Fed interventions. I'd agree, though critically the Fed doesn't (at least publicly).

Wealth inequality supports this notion, and the breakdown of who is buying homes (and whose not) supports this notion. $1,000,000+ plus homes see growth where for the most part every market below it is a different story and first time home buyers are at super lows. Food stamp increases support it (not negative on food stamps, I support them, but they are indicator).


I don't know how much chicken and the egg this stuff dependent on, but as Engineer has pointed out, if political polarization drives financial inequality then wow, that is kind of a mind melt for all the poor and suffering middle class who are at each others throats. The answer/solution would be meaningfully within their reach.

 

[piasabird]

I also see major issues with banks setting whatever interest rates they want like a 40% interest rate on a late credit card. Heaven forbid. I call this Loan Sharking. I think the highest interest rates on credit cards should be linked to prime lending rate. If we get 0-.9% interest on deposits or the prime lending rate than the banks should be limited to a maximum interest rate that is based on that interest rate and some formula. What I am suggesting is something like 5% or 7% over the prime lending rate for a personal loan or a credit card. We are allowing banks to put people in the poor house using credit card interest. There needs to be a more even playing field. Why do people get no interest on their deposits and have to pay say 18%-40% for a credit card?

If this happened with gas prices we would be ready to hang the people at the gas pumps claiming it was price gouging!

 

[piasabird]

If the government proposes to ease off of quantitative easing and the stock market falls and the prices go higher, then that means that we could be in for a severe crash should the quantitative easing stop. That means we have a false economy created by printing money. This just devalues our paychecks and makes stock brokers and corporations rich. Maybe in reality we are still in a depression.

 

[Attic]

Their are proxy nations that can be used to bid up equity and bond markets, most notably Belgium has bought an amount of US treasuries roughly equal to the taper amount the Fed is putting on.

Interest rates on Treasuries can't go up to normal levels, the magnitude this restraint has on poor and middle class due to interventionist policies that appear to be creating wealth inequality is perhaps significant problem/catch 22 for the US.