Saturday, October 13, 2007

Roots Of Inequality

Swedish media, quoting Wall Street Journal reports that income inequality reached a record level in America in 2005, with the top 1% of the population earning 21.2% of all income, up from 19% in 2004 and beating the previous record of 20.8% in 2000.

Bush blames educational factors, and uses this to promote his "No Child Left Behind" program while Democrats blame foreign trade and weaker unions and lower minimum wages and paleoconservatives blaming foreign trade and immigration. Yet the most important factor is the one the Wall Street Journal reporter discusses: the booming stock market. That is of course why inequality peaked at the peak of the tech stock bubble and fell when that bursted, and is now rising again as a new stock bubble is being inflated. Inequality therefore probably rose to even higher levels in 2006 and 2007.

And the cause of overvalued stock prices is of course monetary inflation, while inflation at the same time hurts people with low income to a disproportionate . Which makes it ironic that most leftists only attack the Fed for inflating insufficiently.


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