Not Trump. Not Sanders. Not Cruz. Certainly not Hillary. And not even me. Who? Obama said it. I was astonished at the CLARITY of the statement, considering most economists and all establishmentarians believe something entirely different.
(You know, my computer is underlining “establishmentarian,” but I clearly remember being required in school to learn to spell “antidisestablishmentarianism,” which is basically the same word with two prefixes. If I can remember it, surely a mufti-gigabyte computer can!)
From Yahoo Finance, “Obama articulates why Americans are so unhappy“:
“There are a lot of reasons [why wages and incomes haven’t gone up as quickly as people had been accustomed to in previous generations]. (1) Global competition. (2) Technology. You know, (3) corporate practices have changed. In some cases (4) tax policies that I’d like to see changed, and I’ve tried to push Congress to change have made a difference.“
#1 is just another way of criticizing “free trade.” You’d think Trump or Sanders would have said it.
#2 is almost anti-American, but I’ve been saying it for a few years now, since discovering the role of productivity in causing deflation (see The Equity Premium Puzzle…).
#3 touches on the purpose and function of corporations, vs. what we have come to assume. Corporations exist for the greater public good, and the grant of incorporation is a privilege (not a right) granted in exchange for amassing capital and creating employment beyond what we might otherwise have. If corporate “practices” are slowing the growth of our prosperity, the privilege of incorporation should be revoked. “Profits” are tied to incorporation, and are only a privilege granted as long as the corporation serves the public good.
#4 I imagine Obama thinks the rich are not taxed enough, he doesn’t say. But I have a slightly different slant. Our tax code prevents people from becoming rich and keeps them dependent on employment by over-taxing income, especially in the transition region between upper income working class and minimal self-sufficient investor class. In Money, Wealth & War I argue that if the upper 10% of income earners would make the transition to capitalists instead of workers, that would make the top 10% most attractive jobs available, and everyone would move up in employment and wealth. This would provide the salary recovery that has been missing since 2009. While it is not the intent of this article to make a political recommendation, I note that while Sanders and Trump both appeal to those who have not done well since 2009, Sanders would impose great tax obstacles to becoming wealthy and keep everyone trapped in a job, whereas Trump has devoted a great part of his life to writing books and producing TV shows to try to get people to be more successful and entrepreneurial.