US Economy Now Like Royalist System of Europe?
Recovery in U.S. Is Lifting Profits, but Not Adding Jobs … A Growing Divide: As federal budget cuts begin, high productivity and low interest rates help corporations but not job seekers. … “So far in this recovery, corporations have captured an unusually high share of the income gains,” said Ethan Harris, co-head of global economics at Bank of America Merrill Lynch. “The U.S. corporate sector is in a lot better health than the overall economy. And until we get a full recovery in the labor market, this will persist.” The result has been a golden age for corporate profits, especially among multinational giants that are also benefiting from faster growth in emerging economies like China and India. – New York Times
Dominant Social Theme: If we print enough money the jobs will come.
Free-Market Analysis: This was predictable. Keynesian monetary stimulation doesn’t work. The US has a bifurcated economic system now, which is really the European royalist system.
This would seem to be the result of deliberate economic policies that have virtually split the US into a nation of have-more and have-less. Often much less.
Perhaps Occupy Wall Street was right! We will explain below.
Yes, even the nation’s largest media organizations cannot avoid affirming it (see above). The economic policies put in place revolve around monetary stimulation and predictably are benefitting the largest special interests and multinationals at the expense of everyone else.
The United States was exceptional in the past because its economy functioned within a free-market paradigm that allowed people to pursue their self-interest without artificial barriers getting in their way. But that is changing. Here’s more from the article:
… The Federal Reserve‘s efforts to keep interest rates ultralow and encourage investors to put more money into riskier assets, prompted traders to send the Dow past 14,000 to within 75 points of a record high last week.
While buoyant earnings are rewarded by investors and make American companies more competitive globally, they have not translated into additional jobs at home.