Inequality and growth and why it still matters....

michaels

Robert Peston has finally caught up with what I was saying 3 years ago:
Me: http://forums.moneysavingexpert.com/showpost.php?p=47420997&postcount=6
RP: http://www.bbc.co.uk/news/business-29501233

Do the causes of the crash still matter? I think they do because unlike in a 'normal financial collapse we have not seen the write downs, write offs, foreclosures and forced asset sales seen in the past because unconventional monetary policy has saved the banks, non-bank financials and other highly leveraged companies and consumers.

Normally such 'clearing house' would have resulted in losses for the asset owners - ie the rich; thus reducing inequality, but this has not happened this time. Hence the anemic recovery and the question of 'what happens next?'

Thrugelmir

michaels wrote: »

Do the causes of the crash still matter?

What's changed? The Western world still hasn't addressed the levels of debt that exist. Growth alone will not resolve the situation.

China also faces challenges ahead.

China’s Inscrutable Contraction

http://www.project-syndicate.org/commentary/questioning-chinese-economic-climate-by-kenneth-rogoff-2014-10

Seabee42

The debt problem is huge, it has been before of course historically and industrialisation etc has helped with GDP per capita growth. The problem at the moment is there has been no write down, there are zombie businesses (and banks), can we literally keep growing the economy with ever more debt and or immigration? Will there be another jump in personal productivity to actually grow the real economy?

Generali

michaels wrote: »

Do the causes of the crash still matter? I think they do because unlike in a 'normal financial collapse we have not seen the write downs, write offs, foreclosures and forced asset sales seen in the past because unconventional monetary policy has saved the banks, non-bank financials and other highly leveraged companies and consumers.

Normally such 'clearing house' would have resulted in losses for the asset owners - ie the rich; thus reducing inequality, but this has not happened this time. Hence the anemic recovery and the question of 'what happens next?'

Maybe.

It's also arguable that the poor have cone really well out of this depression. If you compare the lot of the unemployed and underemployed poor during this Great Recession with what happened following the 1878 and 1929 crashes you could argue that the poor have gotten off pretty lightly too.

Thrugelmir

Seabee42 wrote: »

The debt problem is huge, it has been before of course historically

And never previously has the issue of debt been resolved without default (in over 200 seperate financial crisis in more recent history).