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October 30, 2015


So why is the driving force of aggregate demand in our economy relatively unmentioned in business tribunals when it is so crucial to a functioning market?  We know, of course, that the reason we have a stagnant economy is that we have had stagnant (inflation-adjusted) wages for decades. With little money there is little demand, and increased demand via credit cards has its limitations in relatively short order. Then what? When does America get a real and substantial raise beyond inflation-adjusted numbers so that all can prosper due to enhanced demand in the marketplace (even Wall Street)? That should be the topic for discussion in the business press and the homes and streets of America.

We should quit beating around the bush with our corporate word games and libertarian?pretensions to liberty and freedom and talk about what is really holding up America and its people from enjoying a future within reach. It is wage inequality, the unequal sharing of what our economy produces. Witness the Dow versus the pathetic level of the federal minimum wage and tell me how we how we are doing in excising this economic cancer from our midst. Is it any wonder that, unless reversed, we are heading to Third World status such as in Central America’s “banana republics” where there are only two classes – the rich and the poor? It is our task to reverse this process and that necessarily involves a change in the political personnel who have brought us to this fork in the road. We can either vote for candidates who  apparently are in favor of total corporate control of America and descent into Third World oblivion, or we can vote for candidates pledged to favor policies that restore the democratic process with the people in charge of making economic decisions for themselves via a newly restored  representative democracy as envisioned by our Forefathers. I have made my choice.

Eminent economists such as Joseph E. Stiglitz and Thomas Piketty often note the critical importance of aggregate demand (even international aggregate demand) in their writings. Why don’t we see such attention paid to demand by Wall Street flacks? Could it be because any discussion of tepid demand necessarily brings up the issue of how corporations are systematically underpaying their workers in order to enhance their own bottom lines and Dow averages, thus denying their employees any meaningful participation in the market beyond life’s necessities of food, clothing and shelter (if that), and that any such discussion is one the corporate culture would prefer to keep under wraps and out of public view? Maybe; it’s more than a possibility.

Motives are hard to prove. I was told in law school that you must look at objective conduct in order to infer motive, and with Wall Street’s conduct I am highly suspicious if not convinced that their motives include the myopic pursuit of profit by whatever means irrespective of its effect on our economy, our country and its people, or even our democratic institutions. I recall reading how one CEO flippantly stated in an unguarded moment, “We are not here to babysit Americans; we are here to make money.”

The connection between wage inequality and tepid demand is one joined at the hip, and I strongly suspect that Wall Street (given its oblivious pursuit of profit) prefers to continue the present inequality buttressed by word games involving such terms as “demand” and propaganda and political payoffs in order to reduce labor costs and thus fatten their bottom lines. Reduction of costs is not per se bad as a business objective in isolated context, of course, but with millions of the middle class falling into poverty and with the evisceration of the middle class itself after losing trillions in home equity during Bush’s Great Recession along with the continuing disapproval by Wall Street of any raises in the federal minimum wage or any breakthrough in awarding meaningful raises beyond the federal minimum to its corporate workers, it is plainly time for the people to take back the political process from libertarian zillionaires such as the Kochs and conduct their own business. Enough of this tail wagging the dog! It’s our economy; let’s take charge and start acting like it.

So, as usual, the answer to reform and perhaps even survival of an America as we know it is political. Thus it is crucial that voters leave their couches in November, 2016, and vote for either Third World status in which they have abdicated policy to the greedy few or one in which they control their own business and futures via election of candidates pledged to policies that return citizen control of the marketplace to our citizenry. Your choice.    GERALD   E

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