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Good news from the Bank of England (which may be the best we can hope for today as we hear more and more that the "taper" by the US Fed will be starting immediately if not sooner - with the next recession in the wings)! (Plenty of $$$$$ still available, however, for War on Syria.)
Bank of England’s Carney says stimulus working, wary of new “false dawn” (Reuters)
“The economy is picking up and the stimulus is working,” he said, adding that guidance made the BoE’s pre-existing policy stance more effective, rather than loosening or tightening it. But Carney said it was early days for the recovery and the bank stood by its forecast that it would take at least three years for unemployment to fall to 7 percent – the threshold for it to start to consider interest rate rises. Markets by contrast think a rate rise could come in little more than a year. “Our job is to make sure that (recovery is) not another false dawn that we saw earlier, a few years earlier, and to make sure that as soon as possible this economy reaches a form of sustained velocity,” Carney said.
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And as we've said here for the past five years, it's been a wealthy person's recovery (virtually unnoticed by most of the rest of the population - except for those engaged in the production of luxury goods for the rich).
Paul Krugman elaborates based on new data.
Don't miss the comments. Click on Times Readers Picks for the best ones.
Rich Man’s Recovery
By Paul Krugman
Published: September 12, 2013 907 Comments
A few days ago, The Times published a report on a society that is being undermined by extreme inequality. This society claims to reward the best and brightest regardless of family background. In practice, however, the children of the wealthy benefit from opportunities and connections unavailable to children of the middle and working classes. And it was clear from the article that the gap between the society’s meritocratic ideology and its increasingly oligarchic reality is having a deeply demoralizing effect.
The report illustrated in a nutshell why extreme inequality is destructive, why claims ring hollow that inequality of outcomes doesn’t matter as long as there is equality of opportunity. If the rich are so much richer than the rest that they live in a different social and material universe, that fact in itself makes nonsense of any notion of equal opportunity.
By the way, which society are we talking about? The answer is: the Harvard Business School — an elite institution, but one that is now characterized by a sharp internal division between ordinary students and a sub-elite of students from wealthy families.
The point, of course, is that as the business school goes, so goes America, only even more so — a point driven home by the latest data on taxpayer incomes.The data in question have been compiled for the past decade by the economists Thomas Piketty and Emmanuel Saez, who use I.R.S. numbers to estimate the concentration of income in America’s upper strata.
According to their estimates, top income shares took a hit during the Great Recession, as things like capital gains and Wall Street bonuses temporarily dried up. But the rich have come roaring back, to such an extent that 95 percent of the gains from economic recovery since 2009 have gone to the famous 1 percent. In fact, more than 60 percent of the gains went to the top 0.1 percent, people with annual incomes of more than $1.9 million.
Basically, while the great majority of Americans are still living in a depressed economy, the rich have recovered just about all their losses and are powering ahead.
An aside: These numbers should (but probably won’t) finally kill claims that rising inequality is all about the highly educated doing better than those with less training. Only a small fraction of college graduates make it into the charmed circle of the 1 percent.
Meanwhile, many, even most, highly educated young people are having a very rough time. They have their degrees, often acquired at the cost of heavy debts, but many remain unemployed or underemployed, while many more find that they are employed in jobs that make no use of their expensive educations. The college graduate serving lattes at Starbucks is a cliché, but he reflects a very real situation.
What’s driving these huge income gains at the top? There’s intense debate on that point, with some economists still claiming that incredibly high incomes reflect comparably incredible contributions to the economy. I guess I’d note that a large proportion of those superhigh incomes come from the financial industry, which is, as you may remember, the industry that taxpayers had to bail out after its looming collapse threatened to take down the whole economy.
In any case, however, whatever is causing the growing concentration of income at the top, the effect of that concentration is to undermine all the values that define America. Year by year, we’re diverging from our ideals. Inherited privilege is crowding out equality of opportunity; the power of money is crowding out effective democracy.
So what can be done? For the moment, the kind of transformation that took place under the New Deal — a transformation that created a middle-class society, not just through government programs, but by greatly increasing workers’ bargaining power — seems politically out of reach. But that doesn’t mean we should give up on smaller steps, initiatives that do at least a bit to level the playing field.
Take, for example, the proposal by Bill de Blasio, who finished in first place in Tuesday’s Democratic primary and is the probable next mayor of New York, to provide universal prekindergarten education, paid for with a small tax surcharge on those with incomes over $500,000. The usual suspects are, of course, screaming and talking about their hurt feelings; they’ve been doing a lot of that these past few years, even while making out like bandits. But surely this is exactly the sort of thing we should be doing: Taxing the ever-richer rich, at least a bit, to expand opportunity for the children of the less fortunate.
Some pundits are already suggesting that Mr. de Blasio’s unexpected rise is the leading edge of a new economic populism that will shake up our whole political system. That seems premature, but I hope they’re right. For extreme inequality is still on the rise — and it’s poisoning our society.
And I just want to state for the record that I am not the only person who appreciates Mark Knopfler!
(Although this crowd seems to want to tear him apart and eat him.)
Don't miss that spectacular drum solo at the end.
Can you tell how much I think of this guy's artistry?
One commenter at YouTube said "There's only one flaw in a Mark Knopfler song. It ends."
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