There’s an interesting debate going on within Keynesianism at the moment about whether or not the present economic malaise in much of the western world can be accredited to the persistent rise in inequality that has transpired over the last thirty years or so. Arguing in favour of the inequality connection is Joseph Stiglitz; arguing against is Paul Krugman. I’d like to examine what both economists have to say on the topic and deduce as best I can my own view on the subject.
Tag: Paul Krugman
Rise of the Machines: The Robot Economy of the Future
My attention has been drawn to a rather interesting phenomenon by Paul Krugman–that of a gradual shift in the distribution of wealth from labour to capital. As a percentage of the economic total, workers are earning less and less over time, and more and more of our output is landing in the hands of people who own capital–the land, the buildings, the tools, the machines that make things tick. This has interesting implications, and, if I might be permitted to speculate today, those implications may demand changes in how we view what we produce.
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The Decision: Obama’s Difficult Position
Rumour has it the republicans have given Obama an offer to avert the fiscal cliff, the combination of deep, immediate spending cuts and tax increases that the CBO predicts would send the country into a new recession. The offer gives Obama something he cannot get without a deal–most notably, an extension of emergency unemployment benefits. The offer comes at a cost, however. In exchange, the republicans demand a small but painful cut in social security benefits.
Fiscal Cliff Ignorance
I’m back in the United States for a month, so it’s only fitting to write an American piece. There’s a statistic out there that should put fear into the hearts of those of us who practise, either professionally or as a hobby, the art of statecraft. The implications of this statistic are vast for the health of the American economy and the American democracy.
It’s a Trap!
In the rush to come up with a plan of spending cuts and tax hikes, both democrats and republicans have missed the essential detail that makes our current economic circumstances different from any we have previously experienced since World War II–it’s a trap. A liquidity trap, that is, and it’s going to make any spending cuts and tax hikes the US government enacts mean serious pain for millions of people.
Benjamin Studebaker 