Thursday, June 19, 2014

Even Business Leaders Now Realize Widening Inequality is a Terrible Problem

The latest Robert Reich column, via AlterNet:

A few weeks ago I was visited in my office by the chairman of one of the country’s biggest high-tech firms who wanted to talk about the causes and consequences of widening inequality and the shrinking middle class, and what to do about it. 

I asked him why he was concerned. “Because the American middle class is the core of our customer base,” he said. “If they can’t afford our products in the years ahead, we’re in deep trouble.” 

I’m hearing the same refrain from a growing number of business leaders. 

More here.

As Nobel Prize winning economist Paul Krugman has asserted repeatedly for years, your spending is my income, and my spending is your income.  And that's pretty much the basis for consumer capitalism.  We've got to spend.  If we don't spend, consumer capitalism is deeply diminished.  Actually, capitalism more generally becomes deeply diminished because consumption is the biggest part of it, and not just fifty one percent, either.  Consumption accounts for, by some estimates, seventy percent of GDP.  Kill consumption, you kill the economy.

This is one of the big reasons, among several other big reasons, why economic inequality is such an awful thing.  When you tilt the scales in favor of the very wealthy in the way it's been happening incrementally for the last thirty or so years, you're essentially dismantling domestic consumer markets.  Obviously, when you've got no market, you've got no business.  Prosperity fails for all.  I mean, except, of course, for the very wealthy, who may or may not care one way or the other.

But if you care about economic growth, if you care about equal opportunity, if you own or operate a business, then you must necessarily be gravely concerned about people not being able to afford to buy things anymore.  That is, whether you think so or not, economic inequality is messing with your life.  And all the right-wing folk tales about bootstraps, welfare queens, and "job creators" won't do a damned thing to change that.