Inequality, Boom, and Bust: From Billionaire Capitalism to Equality and Full Employment

Description

There is enormous inequality between the income and wealth of the richest 1 percent and all other Americans. While the top 1 percent own 42 percent of all wealth in America, the lower half on the income ladder has only 2 percent of all of the wealth. This book develops a viewpoint contrary to the prevailing conservative paradigm, setting out both reasons for this inequality and the impact of this. To explain inequality, conservative economists focus on individual characteristics such as intelligence and hard work. This book puts forward new evidence to show that changes in economic inequality are primarily due to characteristics inherent in the standard operation of capitalist institutions. Furthermore, the authors seek to explain the cycle of boom and bust by considering political and social factors often overlooked by conservative economists. This book also explores how wealth influences political policies in a way that increases economic inequality even more than its present level. Through analysis of American political and economic institutions, Inequality, Boom, and Bust presents concrete steps for an activist, progressive policy to greatly reduce inequality through free healthcare, free higher education, and reduced unemployment. Inequality, boom, and bust- Front Cover Inequality, boom, and bust Title Page Copyright Page Dedication Contents List of figures List of tables Preface A vision of the future The road to the future The fight to combat inequality and unemployment What’s new in this book? Evolution and excitement Language Appendix to the Preface Acknowledgements About the authors Chapter 1: Evolution of capitalism, inequality, and unemployment The evolution of capitalism How it began The prehistoric clan economy From collective clans to slavery and feudalism The operation of slavery The operation of feudalism and serfdom The aggregate economy of slavery and feudalism From British feudalism to capitalism Evolution of capitalism Three preconditions for business cycles and unemployment Conclusions on the business cycle Conclusions on inequality and capitalism Appendix 1.1 Chapter 2: Evolution of inequality and unemployment in America Definitions Economic growth in America The era of the Great Depression The Golden Age of American capitalism, 1945 to 1970 The Age of Globalization, 1970 to the present (2017) The effect of different eras on inequality Approaches to the problem of rising economic inequality and instability Chapter 3: Storm over economics Inequality versus equality Cyclical unemployment versus full employment Plutocracy versus democracy Franklin Roosevelt’s activist approach Bernie Sanders’ activist approach The long war in economics The basic difference Chapter 4: Inequality and the normal operation of American capitalism Effective demand Two views of aggregate supply and demand Lack of demand and inequality Aggregate cost of supply Profit Implications of this structure for inequality and recessions Economic relations and the plan of the book Chapter 5: Unemployment and inequality Inequality and unemployment in a business expansion Inequality and unemployment in economic contractions Wesley Mitchell and the business cycle Cycle peaks and troughs The cycle base The nine stages of the cycle The rise and fall of employment Unemployment in the two eras Appendix 5.1 Chapter 6: Profit, investment, and inequality Investment and inequality Profit leads, investment follows Investment behavior What causes investment? Profit in the Great Depression Profit after the Great Depression Profit in the Golden Age and the Age of Globalization Specific and reference cycles Economic indicators Profit and investment in the Age of Globalization Why is profit a leading indicator? Why does profit lead investment? Profit and investment interactions in the Golden Age Investment and profit in the Age of Globalization Conclusions Appendix 6.1 Chapter 7: How inequality is affected by boom and bust The conservative view The progressive view Long-run trend of inequality The Inequality Ratio Inequality in the long run Why did the Inequality Ratio decline until 1980? Why did inequality rise since 1980? Class and inequality The Inequality Ratio over the business cycle Inequality Ratio in the cycles of the Golden Age Inequality Ratio in the cycles of the Age of Globalization The transitional period of the 1970s Inequality in expansions during the Age of Globalization Why did inequality increase in expansions from 1980to 2007? Impact of increasing inequality in expansions Conclusions Chapter 8: How inequality affects consumer demand Consumerism and alienation Effective demand for consumer goods and services Consumer spending in the Great Depression Consumer spending in the Golden Age Consumer spending in the Age of Globalization Consumer share Employee share in the interwar era, 1921 to 1938 Employee share and property share, 1949 to 2005 Employee share during the four cycles of the Golden Age Employee share cycles in the Age of Globalization Employee share and profits Consumer share and employee share Why consumer and employee shares move together Relations between inequality and consumption Conclusions Additional issues to be considered Chapter 9: Credit, bubble, and bust Consumer credit Corporate credit The prime lending rate The stock market Other ways the stock market increases inequality Comparing the rise and fall of credit Effect of credit on inequality Mystery of credit Resolving the mystery Conclusions Chapter 10: Government: economic inequality and political inequality The impact of democracy and plutocracy Economic democracy How the wealthy practice class warfare Power and alienation How political power affects inequality Elizabeth Warren and class warfare Economic myths Federal spending in boom and bust How government spending affects inequality Federal taxation Government revenue (mostly taxation) Types of taxes and their impact Deficits: the result of federal spending and revenue Federal deficit How the deficit or the surplus may have positive or negative effects on the economy War spending Mystery of the government Conclusions Appendix 10.1 Chapter 11: Global capitalism, inequality, and crisis Global trade American exports American imports American trade deficit in the Age of Globalization Inequality and trade Global investment Global finance Greece and the bankers The mystery of international relations Conclusions Chapter 12: Story of the inequality cycle Prosperity: why does it end? Crisis Recession Recovery Conclusions Appendix 12.1 Chapter 13: The Great Recession and inequality Long-run trends leading to depression Investments in the Great Recession Investment and profit in the Great Recession Inequality in the Great Recession Consumer spending and inequality in the Great Recession Consumer credit Corporate credit The prime rate of interest Stocks Federal spending, taxation, and deficits in the Bush cycle Federal deficit in historical perspective Exports, imports, and trade deficit in the Bush cycle The trade deficit in historical perspective Impact of the Great Recession on inequality Chapter 14: Financial crisis and inequality The housing crisis Housing construction The bankers The Democratic view The Republican view The progressive view of the financial crisis of 2008 to 2009 Global financial crisis of 2008 to 2009 Bush, Obama, and the great theft Was a bailout necessary? More financial regulations Democratization: a progressive solution Conclusions Appendix 14.1 Chapter 15: Democratic revolution: a progressive road to economic equality and full employment Creating economic equality and full employment 1. Free healthcare 2. Free higher education 3. Infrastructure 4. A living wage and trade unions 5. Progressive taxation 6. End discrimination 7. Democratization of corporations “too big to fail” 8. Democratization of the military-industrial complex 9. A strong and democratic global organization Can equality and full employment be permanent? What is a democratic revolution? The process of democratization Hope Technical appendix: model of the inequality cycle Part 1. Investment cycle and standard deviations Part 2. Basic model of inequality and unemployment Part 3. Flow of model Part 4. The general model Part 5. Flow of general model Part 6. List of variables Part 7. The theory of economic depression and economic inequality Part 8. A theory of the inequality cycle in the global economy References Index