State of the Economy, Part 3 – “Increasing Income Disparity”: Last week, I laid out for you the case that “income inequality” should really be called “increasing income disparity” and suggested that it is a worldwide phenomenon. I also debunked commonly expressed “solutions” for this problem you often hear from leaders in Washington. However, I have not yet presented solutions of my own. Before I do, let’s first examine the factors at work here that I believe are causing this phenomenon.

There were a number of serious recessions during the Industrial Revolution of the late 19th and early 20th centuries. No one alive today has ever talked to anyone who experienced the beginning of the Industrial Revolution. So, with the exception of historians, it doesn’t get as much coverage in contemporary discussion as say, the Great Depression. What you may not know is that the Industrial Revolution caused a large job displacement at first. When the jobs on the farm went away, they were not immediately replaced in a factory. It took time before people figured out what to do with the extra disposable… Read More

*NOTE: SPECIAL SURVEY EDITION. This week’s edition includes an interactive survey. After you finish reading, please make sure to assess my plan and tell me what you think!

Taxes: Taxes are always a big issue in politics and public policy. However, right now there is a crescendo of agreement building in Washington that it’s time to make some fundamental change to our tax system.

The debate in Washington of late has been confined to the so-called Bush tax cuts, all of which are scheduled to expire at the end of this year. Essentially, should we extend all of them, none of them, or some of them? The erudite readers of these missives (that’s you) have heard all of this before and know the arguments for and against the extension and all about taxing the “rich” and such. So, I won’t repeat them here. Economists are unified in their predictions of recession if we are allowed to go over the “fiscal cliff” on December 31 and allow all of the tax cuts to expire and the sequestered spending cuts… Read More