Entries Tagged 'Reviews' ↓

Why High Income Inequality Heralds Economic Crises

Review of Robert Reich’s 2013 Documentary “Inequality for All” – part 2 of 4

‘There comes a point where money has no real utility” (Warren Buffett, September 2016)

In his 2013 film, economist Robert Reich says: Income inequality appears to be a harbinger of oncoming economic depression

Reich bases this hypothesis on research by two other economists about US income tax rates over the 100 year period from 1913 to 2013. In particular, a graph that takes the same shape as the iconic Golden Gate bridge.

Golden Gate Bridge stock photo

Reich points out the two peaks of highest US income inequality between the rich and middle class on the graph occurred in 1928 and 2007, the year before the Great Depressions of 1929 and 2008.

Robert Reich’s answer to why income inequality ‘correlates’ (is associated) with economic depressions in the United States is: because the wealthiest Americans do not spend enough money.

The rich save money instead, by putting it in funds of funds, i.e. hedge funds. Consumer spending makes up 70% of US national income. This is why Reich thinks we need a middle class.

Reich points out that this spending makes the middle class the TRUE JOB CREATORS. Continue reading →

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Why Our Economy is Struggling

Review of Robert Reich’s 2013 Documentary “Inequality for All” – Part 1 of 4

“You can’t step twice into the same river” (Heraclitus, ancient Greek philosopher)

“Inequality for All” (available on YouTube) is an auto-biography {at one point literally :-)} of the life and career of economist Robert Reich along with Reich’s take on the rise and decline of ‘income inequality’ in the US over the past 100 years

Early on we see TV commentator, Jon Stewart quipping that the US ranks as the 64th highest country in terms of ‘economic fairness’—we’re just under Cameroon and above Uruguay, Jamaica, and Uganda. Robert Reich adds: Of all the developed countries in the world, the US has the most income inequality. Continue reading →

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What’s up for 2016?

Forecasting an economic recession  

A number of serious indicators of recession in the US and elsewhere in the world have been visibly in play since last fall.

Predictions of an upcoming crisis are seen daily in foreign news sources and online. But how can we know for sure what’s going to happen?

Right now the biggest downturn lies in the financial markets in the US and elsewhere. Stocks have plunged this year. Likewise, long-term US government bonds (e.g., thirty-year treasury bonds) are becoming less popular with buyers too.

The long-term government-bond trend is a good indicator of recession, but the current stock market slump isn’t necessarily so.
Continue reading →

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