so how does this align with your opinion/idea that a stock market crash today would reduce inequality? more likely the same thing would just happen again.
As I'd just noted in another comment: in 1929 the US (and eventually global) stock markets collapsed.
This set off the greatest period of wealth equality in the US, through a combination of factors:
- Strengthening the power of the Federal Reserve to re-liquidate banks.
- Direct government employment of individuals, whether through the Works Progress Administration (WPA), Civil Conservation Corps (CCC), and eventually of course the armed forces as the US entered WWII.
- Enormous strengthening of labour rights and unions within the US.
- The US stepping in as the world's leading manufacturer in the post-war era, having its industrial plant intact, raw materials available, and demobilisation providing for a vast increase in the labour force itself without wage reductions.
- Generally progressive policies in government regulation, civil rights, educational access, housing access, transportation improvements, and healthcare over the period 1945 -- 1975.
- A highly progressive tax policy.
Not all of that is obviously replicable today. The US faces strong disadvantages relative to other countries in raw manufacturing (though can produce very-high-value goods which make up in trade value what they lack in sheer tonnage) and demographic challenges (along with much of Europe and advanced Asian countries, notably Japan, Korea, and China). But other options remain available and to my mind useful. Changes in tax policy to re-distribute aggregated wealth and make tax havens (both onshore and off) far less viable would likely be good starts. These are of course politically challenging, particularly under present circumstances, but might remain within possibility.
You are missing the mass destruction of assets of the wealthy in WWII and the increase in bargaining power of labour in the post-war years (perhaps driven by loss of life/injury for those of a working age). The post-war public sentiment, at least in the UK, was that the lower orders of society had fought the most and suffered the most, and there was an appetite for a new social contract that saw Churchill voted out from office and gave rise to the National Health Service, etc.
Its probably not easy but I think a policy that protects the workers instead of a policy that protects the corporations / shareholders. You can let corporations go bankrupt - thus causing shareholders to get wiped out, and compensate by protecting the workers and poorer people with government checks until they can find new employment.
Banks are probably the only exception , I don't think you can let the banks fail without risking an economic collapse.
if the government had a sovereign wealth fund it could have bought all the failing companies and "divested" when the market recovered. instead of being massively in debt it could have probably come out on top. granted that incentivizes the government to cause market crashes but there no perfect system.
dredmorbius|1 year ago
This set off the greatest period of wealth equality in the US, through a combination of factors:
- Strengthening the power of the Federal Reserve to re-liquidate banks.
- Direct government employment of individuals, whether through the Works Progress Administration (WPA), Civil Conservation Corps (CCC), and eventually of course the armed forces as the US entered WWII.
- Enormous strengthening of labour rights and unions within the US.
- The US stepping in as the world's leading manufacturer in the post-war era, having its industrial plant intact, raw materials available, and demobilisation providing for a vast increase in the labour force itself without wage reductions.
- Generally progressive policies in government regulation, civil rights, educational access, housing access, transportation improvements, and healthcare over the period 1945 -- 1975.
- A highly progressive tax policy.
Not all of that is obviously replicable today. The US faces strong disadvantages relative to other countries in raw manufacturing (though can produce very-high-value goods which make up in trade value what they lack in sheer tonnage) and demographic challenges (along with much of Europe and advanced Asian countries, notably Japan, Korea, and China). But other options remain available and to my mind useful. Changes in tax policy to re-distribute aggregated wealth and make tax havens (both onshore and off) far less viable would likely be good starts. These are of course politically challenging, particularly under present circumstances, but might remain within possibility.
VieEnCode|1 year ago
weatherlite|1 year ago
sharemywin|1 year ago
from-nibly|1 year ago