PeakTrader.com

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PeakTrader:

Piketty's r and g is bunk. One doesn't necessarily rise at the expense of another.

For example, in the U.S. both r and g have been higher than in Western Europe.

Also, at the height of the U.S. Information Revolution, from 1982-07, both r and g rose substantially.

Moreover, when the U.S. is in a recession or depression, r is high and g is low. The high r didn't cause the low g. The high r raises g, e.g. through monetary policy. When the economy recovers, r falls, or slows, and g rises, or accelerates.

Furthermore, it should be noted, the U.S. not only leads the world in the Information and Biotech Revolutions, in both revenue and profit, it leads the rest of the world combined. The U.S. offshored old industries, imported those goods at lower prices and higher profits, and shifted resources into high-end manufacturing and emerging industries. Increasingly larger trade deficits subtract from g and globalization adds to r, although U.S. living standards improved at a much faster rate. The U.S. has been a Black Hole in the global economy attracting imports and capital, and even attracting the owners of that capital themselves.

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Even houses in Canada, which has more space, are much smaller than the U.S..

According to the Canadian Homebuilders Association the average size of a new house in Canada is “about 1,900 square feet,” and “expect them to get smaller.”

http://www.chba.ca/uploads/pulse%20survey%20results/main%20report2012.pdf

U.S. new houses are about 2,600 square feet:

http://eyeonhousing.org/2013/09/05/new-single-family-home-size-rises/

U.S. per capita GDP is $10,000 a year more than Canada:

http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capita

Also, I may add, it seems, less than 3% of Canada’s population is Black and less than 2% is Hispanic. The U.S. has up to 50 million immigrants from dirt poor countries and a small proportion of them are highly skilled or educated, which adds to income inequality.

The U.S. spends roughly $3,000 a year more per capita on health care than the average of developed OECD countries. Yet, U.S. per capita income is well over $10,000 a year more compared to those countries.

Even the WHO, which rated U.S. health care below Cuba, stated the U.S. is #1 in the world both in labor (doctors, nurses, specialists, etc.) and capital (hospitals, technology, equipment, etc.).

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We've seen lots of redistribution in Western Europe and the results are disincentives to work and start businesses, persistently high unemployment, real income over $10,000 a year less than the U.S., Western Europe lagging the U.S. badly in the Information and Biotech Revolutions, etc..

Keeping the economy near full employment will raise living standards for everyone.

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The Western Europeans don't produce much compared to the U.S., including in health care. So, they don't consume much either. Of course, they benefit enormously from U.S. improvements in health care.

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The redistribution of wealth isn't important. How about creating wealth instead, including putting the over 20 million unemployed and underemployed Americans to work. That would reduce income inequality. Rigorous studies show raising the minimum wage has little or no effect on employment, although the CBO stated it would cost hundreds of thousands of jobs.

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