Alternative Visions - Capitalists Raise ‘Red Flag’ of Inequality

Two of the most wealthy and notable big capitalists, Ray Dalio of Bridgewater Associates (world’s largest hedge fund) and Jamie Dimon, CEO of largest US commercial bank, JP Morgan Chase, recently warned publicly that growing income inequality was driving political instability and could make the next recession or financial crisis very much worse than 2008-09.  Dalio’s recent essays on LinkedIn and Dimon’s latest 50p letter to shareholders both raise the spectre of serious problems on the horizon. But as Dr. Rasmus explains, their solutions don’t even come close to addressing the problem of continued acceleration of income inequality. Rasmus explains the differences between wage inequality, income inequality, and wealth inequality and the separate ‘drivers’ of each. How wage inequality is worse than reported, and how it contributes to income inequality. How forces accelerating capital incomes, however, are the major determinant of income inequality: capital gains escalation, executive pay, and a neoliberal tax system that allows the 1% to keep more of the capital gains is what now drives the income inequality more than wage compression and inequality. How income drives wealth inequality (that in turn drives income inequality). Rasmus critiques the Dalio-Dimon proposals as obfuscations to real solutions to the inequality problem, and offers alternatives to the wage-income-wealth inequality trend. (Next week: a preview of Dr. Rasmus’ next forthcoming book, ‘The Scourge of Neoliberalism: US Policy from Reagan to Trump’, Clarity Press, 2019).