[quote=SK in CV][quote=livinincali]How do you propose to reduce wealth inequality when consumer choices drive the wealth inequality in the first place. Every day a consumer goes to Walmart to buy groceries instead of the local grocery it increases the wealth inequality. Every time a consumer goes out and buys the latest and greatest iPhone rather than keeping the one they have increases the wealth inequality. Consumers making choice to consume and to go in debt to consume rather than save increases the wealth inequality. Every time you put more money into your 401K it makes Wall Street a little more wealthy.
What is wealthy? Taking a little bit from a lot of people. There’s plenty of stupid consumers that voluntarily give away a little bit of their productivity everyday.[/quote]
Consumer choices drive inequality? I don’t think so. What’s happened over the last few decades, and magnfied over the last decade is that the share of corporate revenues that end up in the hands of the workers who actually produce that revenue has declined dramatically.
Corporate profits are at record levels, measured both in real dollars and as a share of GDP. The delta in that income has remained in the hands of business owners, while wages have shrunk. The result is that the wealth built by those record profits remain in the hands of those who own the stock. That has always been the case, except that prior to the last few decades, workers have shared in that growth. That’s not the case now.
It has almost nothing to do with irresponsible consumption.[/quote]
+1, SK.
Add to that the different tax rates for earned income vs. passive income — so the wealthy accumulate and compound their earnings at a much faster and higher rate than workers — and it’s easy to see why wealth and income inequality has become so great over the past few decades.
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Wealth inequality has very little to do with consumption, especially when people are *minimizing* their consumption when spending their money at Walmart (though their decision to shop at places with the lowest prices/lowest wages do compound the problem).
Wealth/income inequality is not strongly correlated with “social programs,” either. If that were the case, then Mexico and other poor nations without social safety nets would have very little wealth/income inequality; while Sweden, Norway, etc. would have very high wealth/income inequalities. This is not the case at all.
