Tilt-A-Whirl

Regular reader of one version of these endeavors is confronted with the following each visit:

It's the Distribution, Stupid

Yes, Bubba re-purposed. But the reality of that notion increasingly becomes, in the words of Dr. McElhone, "intuitively obvious to even the most casual observer".

The problem, however, is significant to both the soft-hearted lefty and the cold-hearted quant. Both groups need stable, yet increasing, macro demand in order to gain their ends. Those ends, at least superficially, are contradictory, yet just a cursory look at the data from the USofA from the 19th century shows how life goes when the 1% really do rule the roost.

Which brings us to Binyamin Appelbaum, now above the pay grade of economics reporter.

[T]he difference in average life expectancy between poor and wealthy women widened from 3.9 to 13.6 years [from 1980 to 2010].

This piece makes the point, the first time I recall from a mainstream pundit, that quant is hamstrung vis-a-vis the real sciences in the way frequently mentioned here:

Markets are constructed by people, for purposes chosen by people — and people can change the rules.
[my emphasis]

That sentence is a big deal. Quant analysis requires a stable set of rules, and events driving data within known limits. I talking to you Contrywide and Blythe Masters. They bent and changed the rules in ways that didn't enter the data until it was too late.

When wealth is concentrated in the hands of the few, studies show, total consumption declines and investment lags. Corporations and wealthy households increasingly resemble Scrooge McDuck, sitting on piles of money they can't use productively.

Again, a frequent observation here. Inflation is rampant in Treasuries just because the McDucks are scaredy cats and are all chasing said Treasuries. Price goes up when demand goes up. Add to that pressure of the Tyranny of Fixed Cost, and the demand for increasing consumer demand, and the capitalist's gonads get sucked up. As production becomes ever more capital intense, the only way to drive down average cost is to increase output, since variable (aka, labor) cost becomes a decreasing proportion of BoM. The cost structure can't respond to falling demand proportionately. However, eliminating labor means, certainly, eliminating middle and lower class earnings. The other option is to shift production to services tailored to the rich. I bet you saw that coming.