Growing Gap Between Rich And Super Rich - Business Insider
Imagine how this change in wealth distribution will eventually affect resource distributions and output choices. (see link here and here) The second fundamental theory in action?? or a massive market failure????
A market failure is not out of the question since there is clearly a principal-agent problem within the distribution of wealth in American society. The wealthy are in control of such a large portion and since the median household income fell from 2010 to 2011 the middle and lower class have even less disposable income than before. However the point that Obama has significantly increased the number of Americans who now have healthcare benefits shows that one of the factors that had helped to further divide the rich and poor is now being taking care of. Hopefully with the continued healthcare reform the middle and lower classes can lessen the divide.
Yes if the global recession continues, I completely agree that we could have such issues. The reason that the rich survive recession is as the article mentions, they have the capital to distribute and absorb the market shock. It is extremely concerning to me then that the current economic crisis is starting to work its way up the social hierarchy. If the billionaires somehow lost their ability to withstand the economic downturn, I can't imagine the trouble we would all then surely be in. However from what I want to believe, the worst is behind us and it won't be long until business is as usual for everyone, including us little people.
My initial reaction to this article was very similar to Travis's. I wondered to myself, "if millionares are struggling to keep their finances together during these times, I must be really underestimating what it is like for families like my own in the middle class." It is scary to think about a situation in which even billionares don't have the necessary funds to put together a management team capable of easing them through a recession. As far as resources go, it seems as though the only way to obtain the proper resources to withstand a recession like this, is to already have a mountain of cash to spend. It's quite ironic actually, the people who probably need to worry about losing money the least are some of the only ones that afford the necessary services.
As I was reading these articles, I couldn't help but worry about the situation that this puts the rest of the nation in. Just like mentioned before, it is difficult to think that the very rich people are having significant economic losses; even they suffered the recession. However, I am glad that other problems are being taken care off, such as Beth mentioned, giving medicare to those who most need it has been a big improvement for society. I also hope that the best is now past us and that the future brings good turns for the nation.
The main point I read through about market restructuring dealt with how the "affluent are shifting away from speculative investments into private companies, commodities and property." With the unsteady state of our current global economy, it makes sense that firms are now focused on less risky ventures. Stability is their goal as the markets are so shaky in our current climate. The Household income problem is sad in its nature, no matter how politicians want to spin it. The rhetoric from both sides paints a picture of how this news is positive/negative for America. But the facts are simple when we compare our development to that of the rest of the world. In terms of economic growth, it is clear (from this and previous blog postings) that the income gap can be associated with this. Rising wealth for the highest of the elite, while the average household income drops to its lowest point in over a decade. No matter what your school of thought for economics, this will undoubtedly play a new role in the upcoming election. Romney will some significant work to do, to persuade Americans that economic policy from history will do us 'more good' for the future
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ReplyDeleteA market failure is not out of the question since there is clearly a principal-agent problem within the distribution of wealth in American society. The wealthy are in control of such a large portion and since the median household income fell from 2010 to 2011 the middle and lower class have even less disposable income than before. However the point that Obama has significantly increased the number of Americans who now have healthcare benefits shows that one of the factors that had helped to further divide the rich and poor is now being taking care of. Hopefully with the continued healthcare reform the middle and lower classes can lessen the divide.
ReplyDeleteYes if the global recession continues, I completely agree that we could have such issues. The reason that the rich survive recession is as the article mentions, they have the capital to distribute and absorb the market shock. It is extremely concerning to me then that the current economic crisis is starting to work its way up the social hierarchy. If the billionaires somehow lost their ability to withstand the economic downturn, I can't imagine the trouble we would all then surely be in. However from what I want to believe, the worst is behind us and it won't be long until business is as usual for everyone, including us little people.
ReplyDeleteMy initial reaction to this article was very similar to Travis's. I wondered to myself, "if millionares are struggling to keep their finances together during these times, I must be really underestimating what it is like for families like my own in the middle class." It is scary to think about a situation in which even billionares don't have the necessary funds to put together a management team capable of easing them through a recession. As far as resources go, it seems as though the only way to obtain the proper resources to withstand a recession like this, is to already have a mountain of cash to spend. It's quite ironic actually, the people who probably need to worry about losing money the least are some of the only ones that afford the necessary services.
ReplyDeleteAs I was reading these articles, I couldn't help but worry about the situation that this puts the rest of the nation in. Just like mentioned before, it is difficult to think that the very rich people are having significant economic losses; even they suffered the recession. However, I am glad that other problems are being taken care off, such as Beth mentioned, giving medicare to those who most need it has been a big improvement for society. I also hope that the best is now past us and that the future brings good turns for the nation.
ReplyDeleteThe main point I read through about market restructuring dealt with how the "affluent are shifting away from speculative investments into private companies, commodities and property." With the unsteady state of our current global economy, it makes sense that firms are now focused on less risky ventures. Stability is their goal as the markets are so shaky in our current climate.
ReplyDeleteThe Household income problem is sad in its nature, no matter how politicians want to spin it. The rhetoric from both sides paints a picture of how this news is positive/negative for America. But the facts are simple when we compare our development to that of the rest of the world. In terms of economic growth, it is clear (from this and previous blog postings) that the income gap can be associated with this. Rising wealth for the highest of the elite, while the average household income drops to its lowest point in over a decade. No matter what your school of thought for economics, this will undoubtedly play a new role in the upcoming election. Romney will some significant work to do, to persuade Americans that economic policy from history will do us 'more good' for the future