Economics is about resource distribution. Laissez faire folks like to say it is about scarce resource distribution, to which I beg to differ, but I’m not a grand economic scholar. Over the past few months I have shown a series of graphs that showed resource distribution in various sectors, as represented by income in those sectors, from the late forties until just a couple years ago. As I pointed out the seventies was a time when our economic system started to function in a strikingly different way, as evidenced by changes in the growth rate of income for the different sectors. The income for financial and service sectors grew much faster than overall domestic income, the income for manufacturing, retail, etc., grew slower. We changed to an economy that produced capital, and services for those whom concentrated capital, at the expense of producing stuff.
I claimed this reveals a system out of balance, due to a long term trend not being corrected. But that need not necessarily be the case. Perhaps we are witnessing an economy correcting itself since the seventies, changing the apportionment of income to different sectors in a manner that benefits all. I presented data earlier on The Middle Class Forum, corresponding to some of the features you will find on the side bar, that shows thing have trended poorly in important ways for the middle class since the seventies. But I could be pulling a fast one on you, emulating those think tanks I’ve otherwise criticized. Perhaps things were trending even worse for the middle class before the seventies, and since then Reaganomics, et al, have ushered in a relative period of moderation.
Yeah, right. But you should not take my word for this, so over the next few weeks or so I will present trend data from the forties to the present that shows some of the effects of our growing commitment to the financial sector since the seventies.
And perhaps I’ll continue to throw in a few metaphors as well.
Tags: Unbalanced Trends
