Something’s happening here… According to S&P’s assessment, “extreme” levels of income inequality can harm growth over long periods of time, and in their view, the United States is approaching a level of inequality that is very near the threshold of being dangerous. As such, S&P says its 10-year growth forecast for the country has been lowered from 2.8 percent to 2.5 percent, noting that the country’s economic prospects were much brighter five years ago than they are today. A primary driver of this inequality, the rating agency continues, is growing disparities in education outcomes between rich and poor that are significantly dragging down overall growth rates. Indeed, S&P estimates that if the American workforce completed just one more year of schooling by 2021, “the resulting productivity gains could add about $525 billion, or 2.4%, to the level of GDP” relative to the agency’s baseline prediction. Schooling — especially in terms of more Americans finishing college — is seen as crucial to lifting wages, incomes and well-being in the years ahead. What’s more, S&P goes on to challenge one of the most commonly held assumptions about growth held by the capitalist class in America: a rising tide inevitably lifts all boats. This, the agency’s economists say, is not an accurate reflection of what is occurring in America today. Instead, in a country where the ultra-wealthy have captured an ever increasing segment of national income, the tide is merely lifting “a lifeboat carrying a few, surrounded by many treading water.” Moreover, say these deeply conservative business economists, such a lifeboat “risks capsizing” the longer such a situation persists. While not exactly a warning that revolution à la Marx might be around the corner, it is nonetheless a rather remarkable thing for those so close to the beating heart of Wall Street to say so openly and frankly. It is also a sentiment being echoed by others in our capitalist ruling class who are similarly disturbed by the possibilities opened up by an America that looks more like Mexico or Brazil than Western Europe. Consider, for instance, the open letter to “fellow zillionaires” penned by Nick Hanauer, a self-described “0.1%er” and serial entrepreneur who nonetheless warns that “the pitchforks are coming.”
Posted on: Fri, 29 Aug 2014 04:57:31 +0000
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