Financialization, share buybacks, the shareholder primacy mindset, decades of tax cuts and government bailouts for ‘too big to fail’ companies, have all worked to socialize costs and subsidize a tiny fraction of the population at the expense of the rest. Systems that don’t self-correct end up imploding one way or another. Prior eras of extreme wealth inequality have typically ended in periods of redistribution through high taxation, confiscation and sometimes war.
A growing number of those who’ve benefited from the current system are increasingly sounding the alarm about the need to take proactive redistributive steps to help rebuild strength in the broader population and economy before more harsh forces do the job. This segment discusses.
Peter Georgescu, chairman emeritus at Young & Rubicam and author of “Capitalists Arise!,” and Torsten Slok, chief international economist at Deutsche Bank, discuss the challenges presented by income inequality and the depth of the problem in the United States. Here is a direct video link.
Also, see hedge fund manager Ray Dalio’s recent essay Why and How capitalism needs to be reformed (Parts 1 and 2) for his ‘To Do’ list on this topic. And, John Mauldin’s Capitalism Gone Wild this week is also worth reading.
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