Wednesday, October 12, 2011

Income Disparity a Failed Government Policy

Want to know why the income disparity has continued to grow, leading to much frustration?

As with most economic problems today you can tie the disparity directly to the policies of the government.

Our system had a built in solution to excesses of capitalism, including excessive CEO wages.  It was known as a recession and it regularly forced everyone from the single mother to the largest corporate board to reevaluate their priorities.  Companies fired underperformers!  Unfortunately the government's desire to lessen the effects of a recession and protect the too big to fail companies has not only extended the pain we all feel but has nearly eliminated the very important effects of that self correcting, excess eliminating mechanism.

Update with some thoughts brought to you by a leftie site via Ace

You've people got it backwards. Capitalism calls for insolvent banks to fail. Socialism calls for them to be bailed out. submitted 11 hours ago by r3compile
Edit: Some more complete thoughts:
The free market gets rid of risky, unstable businesses. Capitalism means if you don't have a viable product, you go away. People vote with their own money.
In Socialism, you vote with other people's money. You keep throwing good money after bad because you like the idea of a stable bank and you don't want to admit that it needs to go bankrupt.
All a businessman can do is try to sell you something that you think is worth the money.
But a government can take your wealth by force, and allocate it to an area that has no viable market, purely for the benefit of catering to voters and trying to get re-elected.
As long as we have a big government trying to run every aspect of the economy, it will be taken advantage of by some minority to the detriment of the majority.
I sympathize with the message of OWS thanks banks get special favors from government. But the answer isn't to give more special favors to labor unions and employees. The answer is to get the government out of the way and let the market flush out all these bad banks so a viable economy can rise.
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