Chart of the Day: The elephant in the room


blog-econ

From the Yomiuri Shimbun, offering a sharp critique of neoliberalism which notes:

U.S. leaders seemingly assumed that economic inequality among citizens would not significantly increase as a result of their policies. This is because they believed in the “trickle down” theory, whereby an increase in the number of wealthy people and large corporations would stimulate the economy and gradually benefit poor people and smaller businesses.

But this trickle down never happened.

Manufacturers moved their production facilities to emerging economies with cheap labor, such as China. Laborers in developed economies were forced to take lower-paid work. Investors started demanding more dividends from successful companies, leading them to prioritize payments to investors over increasing the salaries and benefits of their employees. Large corporations transferred their profits to tax havens to evade taxation.

>snip<

[W]hite laborers — the driving force of Trump’s victory — have fallen to a position of vulnerability over the past 30 years of neoliberalist policy. Perhaps it was a matter of course that their distrust of established politics could not be overturned.

Real estate tycoon Donald Trump is undoubtedly a “winner” in the stratified society. The policies he proposes, such as improving infrastructure, have the potential to boost the economy for the time being. But they also include generous tax reductions for the rich and lower corporate taxes, which could go in the opposite direction of the attempts to rectify disparity.

The many contradictions contained in Trump’s policies are the result of an attempt to attract a wide range of voters.

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