Has anyone noticed the redistribution of wealth that has taken place during the past 30 years?
Clyde Prestrowitz, a foreign trade negotiator who served under President Ronald Reagan, says that during the past 30 years, the percentage of national income transferred from the middle class to the upper 1 percent has increased from approximately 5 percent to 17 percent. That equates to a 12 percent loss of middle-class purchasing power and a corresponding increase of investment power to the upper 1 percent.
The middle-class loss of purchasing power corresponds to about a 12 percent loss of product demand. With the loss of product demand comes a loss of supply demand and thus less need for employees.
Congress has allowed this to happen. Many members seem to have been highly influenced by investment money coming from persons and corporations. To offset the loss of middle-class demand the president is now traveling to many foreign countries to try to talk their leaders into purchasing from American industries. Unfortunately, unless he is very successful, unemployment will probably not decrease below 9 percent or 10 percent until the recent redistribution of income from the middle class to the upper 1 percent is reversed.
That being said, it seems many members of Congress are steadfast in their opinions and will prevent any such reversal.
If Congress cannot be persuaded to correct the recent redistribution of wealth, I guess we will just have to live with the current level of unemployment.