This is a larger topic than can be handled in a comment, but here are my top 3 candidates:
1. technology combined with "winner take most" rewards
2. the exchange of domestic manual labour for a few hundred million people in various developing countries - the winners among low income persons in this exchange were those millions in other countries who were lifted out of their poverty
3. a macroeconomic policy biased towards inflation, combined with the underreporting of it. If we calculated inflation as it was done in 1990, reported CPI would be double today’s official number. If we calculated it as it was in 1980, it would be triple that level.
Light deflation is a natural state of affairs: as productivity improves, prices should fall. Instead, claiming to fear a true debt deflation, we actively try to push reported inflation up to 2%. This tends to favour the borrower (those with access to financial sophistication and markets) over the lender (small saver). Also, and important for this discussion, falling an additional 4%-8% behind every year impoverishes the lower income people over time. A light deflation is good for the lower income people who need to spend a greater portion of their income; it is a purchasing power increase without a tax increase.
Those who are in control want to underreport inflation, because it means that payments which are indexed to it will not have to be increased as much.
Corporations and private equity love it because the tax deductibility of interest. I would limit the debt on which the interest is deductible to 1x equity. That would reduce the motivation for PE to buy out companies by layering on debt. As Buffet says, for most nonfinancial companies, 1 part debt for 2 parts equity is appropriate. Without high debt, we would not fear a light deflation.
We need honest reporting of inflation, and monetary policy that aims/allows for -2% to +2% of it, and an end to the tax encouragement of high debt ratios.
Capitalism and British Common Law are the only known institutions and systems that can produce wealth and a thriving society where all men can prosper. It is man's depravity, through greed and pride, that have corrupted these institutions. There is no balance of power. For the last 100+ years, there has been one controlling body. This body must be destroyed so the Constitution can function properly. That is why many are turning to Trump as they witness this controlling body try to take him out. Finally, life is no longer sacred, and therefore, the country has lost all sense of morality. The country is on life support and it's time to pull the plug.
This is a larger topic than can be handled in a comment, but here are my top 3 candidates:
1. technology combined with "winner take most" rewards
2. the exchange of domestic manual labour for a few hundred million people in various developing countries - the winners among low income persons in this exchange were those millions in other countries who were lifted out of their poverty
3. a macroeconomic policy biased towards inflation, combined with the underreporting of it. If we calculated inflation as it was done in 1990, reported CPI would be double today’s official number. If we calculated it as it was in 1980, it would be triple that level.
http://www.shadowstats.com/alternate_data/inflation-charts
Light deflation is a natural state of affairs: as productivity improves, prices should fall. Instead, claiming to fear a true debt deflation, we actively try to push reported inflation up to 2%. This tends to favour the borrower (those with access to financial sophistication and markets) over the lender (small saver). Also, and important for this discussion, falling an additional 4%-8% behind every year impoverishes the lower income people over time. A light deflation is good for the lower income people who need to spend a greater portion of their income; it is a purchasing power increase without a tax increase.
Those who are in control want to underreport inflation, because it means that payments which are indexed to it will not have to be increased as much.
Corporations and private equity love it because the tax deductibility of interest. I would limit the debt on which the interest is deductible to 1x equity. That would reduce the motivation for PE to buy out companies by layering on debt. As Buffet says, for most nonfinancial companies, 1 part debt for 2 parts equity is appropriate. Without high debt, we would not fear a light deflation.
We need honest reporting of inflation, and monetary policy that aims/allows for -2% to +2% of it, and an end to the tax encouragement of high debt ratios.
Capitalism and British Common Law are the only known institutions and systems that can produce wealth and a thriving society where all men can prosper. It is man's depravity, through greed and pride, that have corrupted these institutions. There is no balance of power. For the last 100+ years, there has been one controlling body. This body must be destroyed so the Constitution can function properly. That is why many are turning to Trump as they witness this controlling body try to take him out. Finally, life is no longer sacred, and therefore, the country has lost all sense of morality. The country is on life support and it's time to pull the plug.