How many times do we have to shoot down this same bottle of snake oil? You know, the one that insists that the way to improve the lot of the middle class and the poor isn’t to directly help them, but, instead, to shovel even more money to the rich. In this way, or so the story goes, the rich will be able to invest this extra lucre back into the economy, thereby producing more jobs and better wages.
Growing economic inequality, it seems, isn’t a problem: It’s a first class ticket to the Promised Land.
Only it doesn’t actually work that way — never has and never will. The only thing growing inequality breeds is even more of the same.
For the latest evidence of this immutable, if constantly abused, truth, check out Paul Krugman’s latest column:
Last fall Edward Lazear, the Bush administration’s top economist, explained that what’s good for corporations is good for America. “Profits,” he declared, “provide the incentive for physical capital investment, and physical capital growth contributes to productivity growth. Thus profits are important not only for investors but also for the workers who benefit from the growth in productivity.”
In other words, ask not for whom the closing bell tolls; it tolls for thee.
Unfortunately, these days none of what Mr. Lazear said seems to be true. In the Bush years high profits haven’t led to high investment, and rising productivity hasn’t led to rising wages.
It looks like there may be something to be said for a little old-fashioned class struggle after all.