Saturday, June 23, 2012

Insight into the U.S. Economy and Increasing Inequality

In this RT interview of U.S. economist Richard Wolff, broad issues of the U.S. economy are looked at, namely the increasing inequality in terms of income and economic opportunity, and the shortcomings of laissez-faire capitalism in terms of balancing self-interest and collective interest. Wolff cites the example of numerous American companies having moved operations and Americans jobs abroad, and these same companies not reinvesting in the U.S. economy like for example the German corporate sector does. Viewers may want to consider how Romney and Obama address inequality and laissez-faire economics. Also, Americans may want to consider how to create a fair playing field for economic competition. Plutocracy is rule of the rich and wealthy through a system of governance which favors the rich and wealthy.



4 comments:

  1. The notion that people’s socioeconomic condition at birth determines their position in life is almost common knowledge. But in the United States, people believed that this rule could be overcome and they would live the “American dream”. Professor Stiglitz shows that this may no longer be true and that inequality is growing at an alarming rate in the U.S. Yet, the link between this inequality and the fact that corporations outsource much of their production of goods and services to poor countries, as Richard Wolff proposes, is not clear. Many researchers state that outsourcing does not cause massive job losses and that the risk of it dramatically reducing job growth has been greatly exaggerated.

    Labour displacement is a not a new discussion. It happens every time there is an introduction of new machinery, improved technology or foreign cheap labour. As such, outsourcing has its defenders and opponents and both sides can present evidence in their favour. But before taking sides or charging the outsourcing practice – which is not likely to be eliminated – with the responsibility for American inequality, one should bear in mind that in a dynamic economy jobs are lost and created and workers are displaced and reemployed continuously. What needs to be done by national governments is observe such developments and avoid insecurity in the labour market via investments in education, retraining of displaced workers and implementation of policies that will reduce inequality and promote social change.

    Luzimar Serviss
    FDA Senior Researcher and PhD in Economics

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    1. RE: Luzimar

      More people are enrolled in universities and colleges than ever before. Student debt is skyrocketing. Education has never cost more, but has never been worth less. So I am reluctant to believe that your prescription for education will be effective. And forget those statistics that say that educated workers have a lower unemployment rate. Those stats include lots of people who graduated in the 60s and 70s, when jobs were more plentiful and stable. Instead, look at the dismal stats for people who have graduated within the last 20 years.

      We are in a race to the bottom, and throwing money at education is an off-target strategy.

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  2. Do you have any specific evidence to support the claim that corporate outsourcing has not significantly impacted U.S. unemployment levels?

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    Replies
    1. Here is some great specific evidence that it has definitely impacted unemployment levels:

      http://www.wellandtribune.ca/2012/06/29/someone-needs-to-put-welland-together-again

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Thank you for sharing your perspective.