Unless of course, you're a wealthy investor.
Real gross domestic product (GDP: the value of the goods and services produced by the nation's economy, less the value of the goods and services used in its production) increased at an annual rate of 3.7 percent in the second quarter of 2015.
A former member of the Fed was on Fox News yesterday and had said "increased productivity" and "tax cuts" were very important for "growth" — and that more growth would best resolve the matter of "wealth redistribution" and "income inequality".
But isn't that called "trickle-down economics" — when a rising tide is supposed to lift all boats? And isn't that what we've had for the past 35 years — all while wages have remained stagnant?
Haven't we had any "growth" at all for the past 35 years? Let's look at the stock market and see...
Hmmmmmm. That looks like "growth" to me. Now let's have look at "wealth redistribution" and "income inequality" during that same period of time (when we've had all that "growth")...
Hmmmmmm. Over the past 35 years, did more "growth" resolve the matter of "wealth redistribution" and "income inequality"?
And if not, then does it really matter to most people if the economy grew by 3.7 percent in the second quarter of 2015 — or if it grew at 1% or 5%? Does it really matter if "productivity" went up (or down) if all the increases in growth and profits just mostly goes to wealthy investors, rather than partially (and fairly) redistributed into higher wages for workers?
What if the "job creators" paid NO TAXES AT ALL — (and for that matter, had no regulations imposed on them) — would that be a guarantee that they'd all be paying their workers fair and living wages? Would that eradicate the problem of "income inequality"? Or is more "growth" only good for rich investors, and nothing more — and that more tax breaks would only put more cash in their pockets?
Prominent economist and Nobel Prize winner Joseph Stiglitz (and a Fellow of the progressive Roosevelt Institute), said: “An economy that doesn’t deliver for most of its citizens is a failed economy.” From his new paper:
America has not been doing well in either equality of outcomes or opportunity. We have obtained the dubious distinction of being the country with the highest level of inequality of outcomes, and among the lowest levels of equality of opportunity, compared to other advanced economies ... the American dream today is to a large extent simply a myth. The life prospects of a young American are more dependent on the income and education of his or her parents than in almost any of the other advanced countries. Wages and benefits for American workers grew at the slowest pace in 33 years in the second quarter this year..."
Yesterday at the L.A. Times Stiglitz also wrote:
Despite a headline unemployment rate of 5.3%, the true labor market situation faced by working families in the United States remains dire. Millions remain trapped in disguised unemployment and part-time employment ... The true unemployment rate, including those working part time involuntarily and marginally attached, is more than 10.4% ... Poor labor market conditions are also reflected in wages and incomes. So far this year, wages for production non-supervisory workers, which tracks closely to the median wage, fell by 0.5%. Median household income — a better indicator of how well the economy is doing as seen by the typical American than GDP — at last measure was lower than it was a quarter-century ago ... Quantitative easing was yet another instance of failed trickle-down economics — by giving more to the rich, the Fed hoped that everyone would benefit. But so far, these policies have enriched the few without returning the economy to full employment or broadly shared income growth.
(* David Dayen at the Fiscal Times tells us why conservatives are so desperate to debunk the chart above regarding workers' wages.)