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mikema63 wrote:Simply that consumption inequality is something that also deserves being considered.
You made a transparently ridiculous extreme argument to suggest otherwise.
Inequalities in consumption obviously happen in our society, and are extremely important. Food consumption inequality for instance, leading to food insecurity, is a serious issue.
I could make up an equally pointless extreme story about any particular way you would measure inequality and it would be equally accurate and fair.
There is no reason not to use consumption inequality in our analytic tool belt along with stuff like income inequality or some very difficult to accurately measure thing like standard of living.
We are faced with a problem when trying to measure these issues on a societal level. We can only look at things that we can quantify. I can quantify a persons income and a persons purchases and other simple measures. I cannot measure their quality of life directly. Using multiple tools we can start to get towards figuring out what the real living standard inequalities are of people in our economy.
Simply posting some attack job on one of those tools because you didn't like it isn't helpful. It's just ideological bias against measuring consumption for whatever reason you have to rage against the idea.
Obviously when measuring consumption in a vacuum without other considerations it can lead to erroneous conclusions, but so can considering income disparities without taking in other considerations like cost of living in various areas.
quetzalcoatl wrote:At first glance, these may appear to be random or unrelated phenomena. They are not. They, in fact, are part of a cohesive whole.
We have worked ourselves, partly by design and partly by historical circumstances,
into a demand-constrained trap - a trap that is devilishly difficult to escape from.
The OP's question of consumption becomes the limiting factor for the economy as a whole.
It goes something like this: As wages decline, workers have less money for consumption.
Given fewer numbers of buyers with less disposable income, there is less demand for goods and services. Those that do have money set aside a large portion of their wealth, so that less of it enters the economy. Thus the size of the overall economies slows its growth or shrinks.
There are two ways out of this trap. The first is a deflationary spiral leading to depression. This could occur through a simple CB mismanagement of the post crash environment. It could also occur as successive bubbles lead to hyper-financialization of the economy (Minsky). In this scenario, ponzi objects begin to overwhelm the real economy, leading to more financial instability - another positive feedback loop. The tendency is acceleration of the bubble/crash cycle leading to a non-recoverable crash (depression).
There is another option.
Government can create money ex nihilo by purchasing goods in the private sector or spending 'helicopter money' via expansion of direct payments. Some combination of basic income and job guarantee would get spendable money to those who spend it the fastest (that is, the demand-constrained workers). The only limit to this process is inflation, which wouldn't occur until companies are 1) competing for labor, and 2) excess capacity is wrung out.
After 30 years of neoliberal austerity, this can't be achieved overnight. The biggest problem with this option is cognitive: getting people to understand that deficits are not a bogeyman and government spending is necessary.
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