How is the economic system broken?
Regardless of whether wealth should be concentrated like that, it still presents a significant problem for the games industry, and leads to things like loot box economies to milk the "whales" for thousands of dollars, since 90% of the addressable market can't afford the product.
The wealth inequality we see now is largely a function of every Republican administration in the last half century passing tax cuts for the wealthy while simultaneously dismantling unions and failing to enforce anti-trust, allowing market consolidation the likes of which we haven't seen since the gilded age.
The result is that wage growth completely disconnected from productivity growth to the extent that subsequent generations are now poorer than their parents' generations.
None of that happened naturally - it was the result of repeated policy changes by the government.
not to mention, the marginal propensity to consume for the top 10% is 5-6 times _less_ than the bottom 90%, so I don't know how you can claim the current consumption rate is good?
It's perfectly good for the economy if wealthy people save/invest in production instead of consume themselves.
Pointing out that poorer people have higher MPC simply doesn't mean that redistributive policies would increase production or consumption. It's entirely possible that such policies would decrease overall savings rate which you seem to think would be good, but would reduce total production and consumption.
the main differences afaik from movies & music industry are
- larger percentage of highly technically skilled workers who could make more money in another industry with their skillset
- it's a younger industry and thus has slightly less entrenched "this is just how things are done" cultural energy, allowing such articles to exist, fewer nepo-babies in control positions, etc
but as it has grown and every other entertainment industry has been getting their fingers in the pie, it has increasingly been adopting those toxic practices that have long existed in art under capitalism
How could today ever be classified as inflation when the purchasing power is declining even faster but not because people have more money to spend, mainly beause they have less.
Why for the consumers that feels nothing like inflation whatsoever. How could it? /s
>US dollar has lost 20% of value over the past 5 years.
Sounds like an accurate statistic. Relative to a consistent benchmark that means most to Wall Street and the professional economists who serve them. That's who has and controls most of the money and who the government responds to. Their outlook definitely depends on these statistics being consistent with how it has been in the past when things were quite rosy. There needs to be an obvious path (for them) to once again return to optimistic outlooks similar to how it has worked during previous downturns. As intended.
Too bad.
For the general public an even more accurate measure of damage to the dollar could be the Big Mac index, but I'll go you one up because I just stopped in to McDonald's (the same location) for the first time in 5 years and got an even more representative identical $1 ice cream cone and it is now $2.39. That's without tax. This might have happened even quicker than 5 years for all I know.
This is a product that was engineered to cost exactly a dollar over the long run, and a long run it has been. But no more, now it is engineered the same way and the cost still reflects the very minimum they can get by selling it for, just as always. That's why it's only $2.39 by now and my estimate is it will go up further before there is a chance of coming down, if ever.
That's a greater than 50% drop in purchasing power for the general public already. McDonald's has a better internal gauge on that than New York banks, how would a bank know as deeply if they are merely major shareholders in McDonald's and nothing like the general public anyway? This is the type of thing corporations try to obscure in their financial reporting which makes it even worse. McDonald's is huge and a more accurate barometer of what the general pubic experiences than most economists.
Walmart's "engineered" pricepoint products for low-income consumers are not reflecting this full effect yet, closer to a 30% drop, but they are way bigger and better able to weather the storm, plus don't have the more realistic inclusion of the pain that the franchisees are seeing in addition to the corporation. Which seems to put McDonald's more in line with the general public at this point. I expect that Walmart has had professional economists on staff for their own internal purposes for a while now, who also have more accurate data plus more current than Wall Street has about the general public at any one time. But due to the professional "nature" that they share with their counterparts at the banks and within government, that could be why they sometimes have "rollbacks" and price increases in rapid succession when it's obvious each effort was intended to carry forward to the percentage extent deployed but last much longer, with no further changes foreseen otherwise it would not be reversed so quickly. This coincides with major reshuffling of SKUs like never before since their "superstores" got started, with some tendency appearing like catering a bit to "whales" themselves. Maybe a hedge in case the lower-income customers' spending continues to decline to the point of not being able to support such size going forward. IOW looks like Walmart is more like Wall Street now than McDonald's.
That makes me suspicious that even with the best data, current economic thinking among professionals has already abandoned the general public whether they are trying to cater to the lower income portion of the US or not.
Anyway, looks to me like it is similar to the way it was after Nixon had his way with the dollar, once it gets bad enough for the banks to begin to experience about a 50% drop where they now have "only" 20%, there will finally be a fire under enough government peoples' ass to start taking some action that might be able to lift all boats. Regardless, there will be tens of millions left with nothing but life preservers which can do nothing but directionless bobbing compared to those who manage to stay aboard some kind of vessel. In addition to the growing tens of millions already ordained to drifting in that "non-boat" along with the ones already there.
But nothing like that will be taken too seriously until that level of pain reaches the top, and only under desperation after there is no longer a viable way back in any familiar fashion for them.
Not sure what started this wave of CPI skepticism but it's so banal.
Happy for you, though. Or sorry it happened.
Ah, what's the difference anyway any more, not sorry or happy about it but maybe the effort at being neutral instead of emotional has not been completely wasted ;)