[P2P-F] Fwd: The "Investment" quandary...

Thu Feb 6 17:00:28 CET 2014

---------- Forwarded message ----------
From: Tom Crowl <culturalengineer at gmail.com>
Date: Thu, Feb 6, 2014 at 7:59 AM
Subject: The "Investment" quandary...

How Can Adam Smith's Ideas deal with an investment and political climate
(along with constituencies dominating both parties) virtually demanding
that returns exceed the natural rate of return in a maturing economy? (I
believe it can be answered... but it won't be very popular.... especially
among those most needed to get it fixed)

*From the NY Times, Jan 28, 2014:*
*Capitalism vs. Democracy
<http://www.nytimes.com/2014/01/29/opinion/capitalism-vs-democracy.html>*

"If the rate of return on capital remains permanently above the rate of
growth of the economy - this is Piketty's key inequality relationship,"
Milanovic writes in his
review<http://mpra.ub.uni-muenchen.de/52384/1/MPRA_paper_52384.pdf>,
it "generates a changing functional distribution of income in favor of
capital and, if capital incomes are more concentrated than incomes from
labor (a rather uncontroversial fact), personal income distribution will
also get more unequal -- which indeed is what we have witnessed in the past
30 years."

*This reflects a fundamental problem with the artificial inflation of
various investment vehicles... which are NOT matched... or even remotely
connected to any real change in overall economic conditions.*

*"Trickle Down Economics" supported by money creation directly injected
into investment markets to artificially inflate returns ultimately hinders
both any potential for real growth... as well as the social contract upon
which it ultimately depends.*

*Could there be any 'social structure' able to act at least as somewhat of
a counter-balance for the drive towards an 'inequality relationship'?*

*I've got one worth thinking about.*

Regards,

*Tom Crowl*
http://CulturalEngineer.blogspot.com

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