It took two decades, but economists seem to be finally admitting that income inequality is based on two primary economic policies and occurrences: globalization - free trade, you know, that isn't really free - and advances in technology. Both are actually mentioned in this Bloomberg story: [
"Obama Decries U.S. Income Gap That Has Widened Under His Watch"].
Much of the gap is out of the president’s control, economists say, citing forces such as globalization and the spread of technology that are overwhelming government remedies. Yet while Obama complains that Republicans are blocking his efforts to boost the minimum wage and provide universal pre-school, other policies that he has enacted such as trade agreements also may have contributed to inequality, they say.
“There are things he could do that he hasn’t done,” says Dean Baker, co-director of the Center for Economic and Policy Research, a Democratic-leaning research group in Washington. “He’s done nothing to rein in the financial sector.”
Maybe I haven't been paying attention (no, that's not it) but I really think this is something of a first, where the two things have actually been cited as a cause for our economy's perilous situation. Reining in the financial sector won't really fix things. Yes, the country can raise revenue through transaction taxes on Wall Street, do it, especially if it keeps income taxes from being raised. But those pirates are always going to do what they do (the problem is that they can drag everyone else down with them and they get bailed out).
The mystery here is the change in admission. Economists nearly always praise globalization to the point of illness. Free trade really is a cult. You can't talk about it. If you do, you're pilloried.
Technology has eliminated jobs but also created them ... good paying jobs too. Billionaires. I bet there is a balance, of sorts. But together, boom.
Maybe economists are starting to realize what is going on ... or finally just admitting what some of us have always known. Then again, maybe not. We'll see.
