Washington Monthly: Free Money for the Fed or Everyone?
|March 26, 2014||Posted by Staff under Editorials|
This 2014 excerpt of the Washington Monthly, March/ April/ May, is by Ryan Cooper.
How would you like to get $2,000 in free money, fresh off the government printing presses? And we’d do it for all Americans on an ongoing basis? And that doing so would solve our problem?
As a percentage of total output, wages have fallen from a high of almost 52 percent around 1970 to less than 43 percent today. Meanwhile, inequality within wages also increased. The rich began capturing nearly all the results of economic growth —- the top 1 percent’s share of national income increased from about 8 percent in the mid-’70s to about 23 percent today.
The wealthy disproportionately save their money rather than spend it. They don’t save by piling up huge pyramids of cash like Scrooge McDuck, they “save” by buying financial assets —- which means that most of the fruits of economic growth have been channeled into asset price increases. Since the crisis, while both output and employment growth has been weak, the stock market has regained all the ground lost since 2009 and then some.
Such mass money creation is hardly new: the quantitative easing program has already been carried out in a similar way —- with trillions of dollars in new money.
There is no reason to think that our problem will be cured without some kind of aggressive change. If we change nothing, we could be stuck in our current situation for decades.
Ed. Notes: Some people can justify doing the right thing only if it’s good for “the economy”, not if it’s good for real living human beings. But whatever their reason for getting some of the abundant surplus into the pockets of everyone, every voice added to the call for such an extra income is another step toward eventual victory.
A more accurate analysis — one less distorted by paying obeisance to the ruling class and our coercive customs — would note that our spending for land and other aspects of nature (such as oil) does not reward anybody’s labor or capital (nature was not created by any of us) and that how much we spend for sites and resources is set by our demand for them. Hence, owners of the earth — something all life needs and all humans deserve — owe those whom they displace (just as they are owed by others who displace them). Thus, getting an extra income from our aggregate spending for parts of the planet is not a favor from anyone, not an act of charity or generosity, but our rightful share of the natural bounty, which is an automatic surplus, and should be treated as our common wealth.
It’s a moral position but it leads to the most practical of policies — geonomics.