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The Only Economic Solutions

Economic stagnation is poised to slide us into another recession (July 2015). The Federal Reserve has done what it can. What are the solutions?

Wage increase is the main solution. It isn't just me calling for this. The Brookings Institution, The Economic Policy Institute, Robert Reich, Paul Krugman, Hillary Clinton, and Bernie Sanders, are all calling for wage increases.

Be practical here, the GOP can't even think of such a thing without incurring the instant wrath of its donors and gerrymandered districts. Don't expect the GOP, the Chamber of Commerce, or the right wing think tanks to do anything more than spit acid and denials. They are financially barred from even thinking this even if they think it would help. They can't.

Wage decline and job decline is a major cause of economic stagnation. While 340,000 good wage earners retire each month, only 225,000 new jobs are created, which barely meets demand, and those are generally lower wage jobs in service industries.

The major corporations are net job destroyers, research shows. They largely do this through mergers and acquisitions, and technology.

Small business, which employs around 80% of people, is not growing. No growth, no new jobs.

The pressure on jobs and wages is downward. Labor is generally easy to find, so wage competition is low. Companies are always under pressure to do more with less, and this generally works out to fewer jobs and lower wages.

The economy is caught in a bind. With wages low and jobs and wages continuing to decline, consumers don't buy, so business, whether corporations or small business, can't expand.

The answer is raising wages. Wages fuel spending, which fuels business growth. Business growth causes more jobs.

The notion of spending less is an irresistible poison to the economy. It causes stagnation and recession.

The other thing we need to do is put a stop to mergers and acquisitions.

Other viable options are Income Redistribution, and stock market taxation, as I explain in this article: Economics of Financial Redistribution.

Other Resources and links: