Sunday, 12 September 2010

An unsustainable economy?

An insight from Tom Hickey which deserves a wider audience.

"Institutionally, the global economy is being run by the wealthy and powerful chiefly for their interests, with trickle down or hand outs for the rest. Labor arbitrage is keeping wages (incomes) low. The wealthy think this is great because it increases profits and keeps goods inflation in check. However, this lowering of income results in constriction of demand, which in turn results in overcapacity. To make up for this, the game plan was to substitute debt for income, and that blew up since it was unsustainable. Now everyone is trying to export their way out, and this is unsustainable, too."

Time for 'bubble up' to replace 'trickle down'? I have no problem with people getting rich, but surely that should be a reward for pulling the rest of society out of relative poverty, not putting them in it.