Friday, June 13, 2014

Goldman Sachs CEO on Income Inequality

Worth checking out what Lloyd Blankfein, the CEO of Goldman Sachs says about the growing income inequality:

Income inequality is destabilizing and "responsible for the divisions in the country," CEO and chairman of Goldman Sachs Lloyd Blankfein said on "CBS This Morning" Tuesday.
"The divisions could get wider," Blankfein said. "If you can't legislate, you can't deal with problems. [If] you can't deal with problems, you can't drive growth and you can't drive the success of the country. It's a very big issue and something that has to be dealt with."
He said one way to deal with it would be to "make the pie grow."
"Too much of the GDP over the last generation has gone to too few of the people," he said.

He also hints at the need to look at how the pie is divided, by the way.  Because the pie has been growing; it's just that it has been eaten by fewer people.  So the growth policy isn't really working, right?

The story goes on explaining how hard it is to figure out the reasons for the growing income inequality.  Though I respectfully want to point out that several of the reasons are quite easily determined, because they are the consequences of specific policies:  Increase the regression of income taxes, favor capital over labor in who pays the most taxes,  encourage the off-shoring of good jobs, do your utmost to tear up all safety nets (which the rich don't need, duh).

Blankfein's reference to politics is that "if you can't legislate" comment.  But the problem of American politics is that they are money-driven, that they are beginning to mirror the needs and desires of the one percent and become less and less reflective of the more general needs or desires.

Indeed, the same appears to be true on international level, too.  Trade policies are often crafted to comply with the interests of corporations, not with the interests of workers or consumers.