Friday, January 09, 2009

No Solutions- The Obama Gap - Unemployment Figures Dec 2008

The Obama Gap - Paul Krugman
Unemployment Numbers for December 2008
Even Paul Krugman, appears unwilling to say what the real problem is. The fact is the real problem is still not being solved.
The problem is wealth polarization and wage stagnation. This unwillingness to discuss the real problem makes the problem that much bigger.

The fact of the matter is that the only people who have the kind of money needed to jump start the economy is the rich.

I warned about this in September 2008 - The Solution is Wage Infalation via Tax Policy
and again in October 2008 - Stimulus and the Need for Wealth Distribution
The problem is simple. In order to compete on Wall Street companies need to make huge, huge profits. The result is even if a company makes huge profits, their stock prices fall because someone else makes huge, huge profit. So to be competitive companies must lower wages.

The only way to solve this is for government to change the rules of the game. A good example would be to return to income tax levels on the rich that are pre-Reagan.

In that there is no real solution (i.e. this is never going to happen), this is my last political post on this blog. For anything political see The Post-Partisan.

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