ACA Repeal/Replace: Progressives Face Moral Dilemma

[pbrower2a]

(09-13-2017, 10:33 AM)David Horn Wrote:

(09-12-2017, 06:10 PM)Bob Butler 54 Wrote: I've been vaguely watching the French economist Thomas Piketty.  He is pushing more detailed data, different models and a theory of how it is we end up with wealth inequality.  He has gathered attention, but I haven't dug deep enough to hop on the bandwagon.  His followers are looking into the elites and how their values models encourage the wealth divide.  This, of course, makes him someone I think worth watching.

Piketty is a good example of simple models telling great truths.  He simply looked at something so obvious, its amazing no one else had: that the rate of return on investment must be less than the rate of overall economic growth to lower inequality.  If the opposite occurs, as it has for quite a while, then wealth grows among the investor class faster than the economy in general.  Allowed to run to its natural extreme, all the wealth of the nation (or the world, for that matter) will concentrate in the hands of the investor class.  This does not require more precision than the basic existence of r > g.  The rest is all about how quickly the change occurs, not whether it does.

It's hard to imagine how that could be anything other than true. Maybe if the difference goes into capital formation we have a possible counter-argument -- that even if economic inequality becomes greater, then at least that will result in more job-creation and hence some compensation for more inequality. More people working at better-paying jobs would be worth it.

But most likely a high return on investment involves either a very new business activity (a dynamic situation) or some scheme to monopolize a market or privatize a part of the public sector (guaranteed profits for a monopolist who still has the right to gouge and to have protection from the market). Most can excuse a dynamic situation, but monopolistic gouging? No.