Here are charts showing the result of our adoption of extreme neo-liberal economic policies. The result is huge income inequality. Our oligarchs are now in the same league as Russia and Iran's, grabbing about the same % of national income. In the 1990's the 1% had the largest share of the nation's income. And in the last 20 years the United States continued to dominate with an ever larger share.
Notice Germany, The share of the top 1% has barely moved over the last 20 years. Germany has learned its lesson, nazi extremism was not a good idea. So they have not jumped on the extreme neo-liberal band wagon. Their neo-liberalism is called
Ordoliberalism. (Confusingly, for us in the US, they call themselves neo-liberals too) Ordoliberalism ensures free markets by using government control of markets (Funny, I remember when we used to do that too). In Germany labor and capital work together. As a result, they have a country with low unemployment, high wages, lots of exports with a positive balance of payments. A shining example of how to do things. A country very much like we used to be.
In contrast to the United States, Germany
plans to spread the pain of higher health costs over the whole economy. Everybody has to share the burden, service providers face cuts and people face premium increases. In the neo-liberal extremism mode, the whole load is placed on the payer. Also, like Japan, Germany's medical system provides great service with low costs. They don't just stand back and turn the free market system loose, they
manage health costs. The government steps in and makes changes. Their universal health care system started in the 1880's, so their long experience with socialistic medicine might provide examples that we could use.
Here is a graph showing the oligarch's increasing share of national income.
Here is Vanity Fair's take on Income Equality -
In terms of income equality, America lags behind any country in the old, ossified Europe that President George W. Bush used to deride. Among our closest counterparts are Russia with its oligarchs and Iran. While many of the old centers of inequality in Latin America, such as Brazil, have been striving in recent years, rather successfully, to improve the plight of the poor and reduce gaps in income, America has allowed inequality to grow.
Economists long ago tried to justify the vast inequalities that seemed so troubling in the mid-19th century—inequalities that are but a pale shadow of what we are seeing in America today. The justification they came up with was called “marginal-productivity theory.” In a nutshell, this theory associated higher incomes with higher productivity and a greater contribution to society. It is a theory that has always been cherished by the rich. Evidence for its validity, however, remains thin. The corporate executives who helped bring on the recession of the past three years—whose contribution to our society, and to their own companies, has been massively negative—went on to receive large bonuses. In some cases, companies were so embarrassed about calling such rewards “performance bonuses” that they felt compelled to change the name to “retention bonuses” (even if the only thing being retained was bad performance). Those who have contributed great positive innovations to our society, from the pioneers of genetic understanding to the pioneers of the Information Age, have received a pittance compared with those responsible for the financial innovations that brought our global economy to the brink of ruin.
Edited by david ellis, 30 December 2011 - 06:18 PM.
