Under the Harper Conservatives, inequality is skyrocketing. Income for the wealthiest 5% has increased 12 times faster than for the rest of Canadians. Now, in a faltering economy, the Conservative plan still neglects most Canadians with no new investments for jobs, cuts to economic development, and a $36 billion dollar cut to health care. With the Conservatives, you and your family aren’t in the picture.
By Kemal Dervis and Uri Dadush
U.S. President Barack Obama recently committed himself and his administration to fighting the scourge of income inequality. Indeed, it is not a moment too soon to focus on this issue.
This U.S. recovery has been incredibly unequal, with the incomes of the richest 1 per cent growing robustly, while the bottom 99 per cent are stagnant. For a long time, few economists – even those concerned about inequality – have thought about this topic in the context of macroeconomic policy.
As it turns out, high and rising levels of inequality may well be a cause of increased macroeconomic instability. But the negative spiral doesn’t end there: High inequality also contributes to a fraying of the political consensus, is associated with boom-bust credit cycles and may ultimately lead to a chronic weakness of economic demand.
The United States is now caught in a vicious cycle. The cycle starts with stagnant incomes and a biting credit constraint at the middle and low end of the income distribution. As dramatically exemplified by the large numbers of continuing and still unresolved home foreclosures, this has led to low expectations for effective demand growth – and therefore low business investment in the U.S. economy at large.
By André Faust
Over the course of the last several hundred years, the way business has been carried out have evolved to a state where these mega corporations have become almost untouchable and have become a state within themselves. In addition some of the high end corporations have acquired wealth that exceeds the wealth of most developed countries and can directly affect the Gross Domestic Product (GDP) by either productivity or reducing their productivity. Using their vast amount of wealth and control over the human and natural resources they have become very successful in getting the world governments to represent the interest of the Corporate State not the citizens their respective countries which classical government use to do.