Saturday, December 17, 2011

It's not the income disparity--it's the disconnect

You know the scene in the movie when the bad guys unhitch the train from the engine and it chugs away, stranding all the cars in the desert? That's what's happened to America.

Only people keep talking about it as if the huge and growing income disparity between the wealthiest 20% and everyone else is the problem. It's not. It's the symptom of the problem.

What's most wrong with the current disparity is that the fortunes of the very wealthy have become decoupled from the fortunes of the rest of us.

Back in the day the head of a company did better if the company did better, & worse if it didn't.

But if your company's "product" is money manipulation, carried out by a small staff with big computers, instead of providing goods &/or services, there's no real connection to the well-being of the country.

If a manufacturer moves its plants abroad (to countries like China that block our own exports) & bribes government to make that legal & & even give it tax breaks to do so, then the well-being of American factory workers becomes irrelevant.

If a corporate CEO's pay has no relation to how well the company does--as is true for most of the Fortune 500 now--it doesn't even matter how well the company does, & platinum parachutes & conspiring boards of directors make top managements, collectively, a class that looks out for each other & to heck with the companies they helm & their stockholders.

And their kids don't serve in the military.

Unregulated capitalism morphs into crony capitalism where there's little social mobility & the captains of industry use their Croesian wealth to capture the government, which then works for them, not us. Travel in a bunch of 3rd world countries, as I have, & you'll see how this pans out.

Decoupling's the key. See?

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