It's Inequality Stupid. AND the Political Climate!

Harvard Professor Michael Porter reveals the real reason why the US economy is in the dumps in this video here.

“The confused national discourse about our economy and future prosperity in this election year is our worst nightmare,” Harvard Professor Michael Porter writes. “There is almost a complete disconnect between the national discourse and the reality of what is causing our problems and what to do about them. This misunderstanding of facts and reality is dangerous, and the resulting divisions make an already challenging agenda for America even more daunting.” 

In its just-released report on competitiveness, “Problems Unsolved and a Nation Divided: State of US Competitiveness,” Harvard Business School (HBS) found the US economy currently faces grave concerns. And the path to a solution—namely tax reform, immigration reform, and infrastructure investment—is being hindered by the current political climate. 

Led by Porter, along with Professors Jan Rivkin and Mihir Desai, the report finds that since the launch of the US Competitiveness Project in 2011, concerns about weak job creation and stagnating incomes—particularly for the middle class—have not waned.

The report adds that the wrong diagnosis, along with political paralysis in Washington, has meant that we have made no meaningful progress on any of the critical policy measures needed to address the nation’s underlying competitive weaknesses—which would restore economic growth and also the standard of living for the average citizen.

Porter says the key issue for America today is a lack of “shared prosperity,” as working and middle-class citizens are struggling.

“The lack of shared prosperity has rightly been a central issue in the 2016 campaign, but the diagnoses and proposed solutions are way off the mark,” the report points out.

For more on the Professor's conclusions, click here.

And lurking behind that reasons is this reason: the lack of inexpensive-to-extract oil, which, according to Gail Tverberg is the cause of the professor's reason. For more, click here.

What makes things worse, is that "the rich go to enormous lengths to avoid paying taxes"!



Photo Credit: Dan Kinwood, Getty Images (copyright Getty Images)

"I tell you, it's not right! It's not right, I tell you!" (from Aldous Huxley, 1984, via bad memory)

From The Guardian UK (The Automatic Earth where I first found this, has its own blurb with other article snippets you wouldd want to look at):

"Despite their soaring share of the nation’s wealth, the rich go to enormous lengths to avoid paying taxes."

"Romney defended his sons by declaring that they served their country by 'helping me get elected'." (tip o' th' hat to Raul Ilargi Meijer)

How America's rich betrayed their fellow citizens
by Anthony J. Gaughan, The Guardian, Monday 25 April 2016

In the past, wealth came with responsibility. Today’s rich avoid taxes, military service, and charitable giving. No wonder we’re seeing a populist backlash.

The author F Scott Fitzgerald once wrote that the “rich are different than you and me”.
Fitzgerald’s observation rings especially true today. The growing divide between the wealthy and everyone else is one of the pre-eminent issues of the 2016 presidential election. A tidal wave of public anger over income inequality and the decline of the middle class has made the rich a popular target on the campaign trail. The best example is the remarkable success of Bernie Sanders, who has tapped into the populist spirit of the electorate by calling for a “political revolution” against the “billionaire class”.

Republicans routinely condemn such rhetoric as the reckless promotion of “class warfare” by irresponsible populists, but the reality is class conflict is a two-way street.

Sanders and other populists did not create the class tensions in American society. Instead, wealthy Americans themselves played a central role in creating the conditions that gave rise to the angry and populist mood of the 2016 election.

Although America has the largest economy in the world, real wages have not gone up since 1972 because most workers have experienced stagnating incomes for decades. Across the country middle-income Americans face a precarious economic future. Median income has fallen in over 80% of America’s counties since 2000, a trend that is accelerating. Even mortality rates reflect growing income inequality. Poor and rural Americans now die at rates well above that of wealthy and urban Americans.

Meanwhile the rich just keep getting richer....  Since the 1980s, rich Americans have maximized their share of the nation’s prosperity at the expense of the rest of the country. Adding insult to injury, a growing body of evidence suggests that many rich people today simply do not care about their fellow Americans. The old concept of noblesse oblige has declined among the wealthy to a disturbing degree.

To understand how the rich have changed, one needs to understand how the upper classes used to behave.

No single location encapsulates the worldview of “old money” families better than Harvard’s Memorial church, which stands in the center of Harvard Yard. The church’s walls list the Harvard students, alumni and faculty members who have perished in America’s wars since 1917.
The numbers are breathtaking. During the world wars, thousands of Harvard students and alumni served in the US military.

Harvard’s student body was drawn primarily from America’s richest and most well-connected families. Those families could have pulled strings to ensure their sons stayed out of combat. But they did not, as powerfully demonstrated by the list of names at Memorial church and similar memorials across the Ivy League. During the world wars, the upper classes did their part to defend the nation.

 

Things could not be more different today.

And it all started with Thatcher and Reagan, and the "Greed is good" mentality they spawned. And of course, nobody can be better at being greedy than narcissistic, self-centred rich people.

More here.