from Jesse’s Café Américain:
Not everyone can become a waiter or a bartender. And as more disposable income accrues to the top, and is deployed in luxury goods and the pursuit of rents and acquisition, the rest have lest to spend for goods that stimulate the aggregate demand.
As you know I would ascribe this slow decay in economic activity to the ‘top down’ monetary stimulus being deployed by the Western central banks, and their overattention to the well being of the largely broken and misdirected financial sector that was in fact primarily responsible for the crash in 2008. That they corrupted the regulatory process along the way for their own benefit is an ancillary cause at best.
As I have been saying since roughly 2008, the Banks must be restrained, and the financial system reformed, with balance restored to the economy, before there can be any sustainable recovery.
Since greed has no limits by its very nature, and since the credibility trap is preventing the one percent and their enablers from engaging in meaningful reform, I conclude that things will continue to get worse until there is a real break in the system that ends the feedback loop of the abuse of power and corruption of public policy.
I believe that the current election in the US, which is surprising to so many establishment pundits, is a clear indication of this. Now whether it is fruitful change or not is another thing altogether. We do see that the odds in the post 1930s political changes were a rather mixed bag.
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