Banking Hearing on Income Inequality

Elizabeth Warren has a post that features an appearance of hers at a banking committee hearing.  Accompanying the video, she says:

We now have two decades of evidence that when corporations and their investors thrive, the profits no longer trickle down for working families to thrive too. Yesterday I asked a panel of income inequality experts: If we can’t count on CEOs to reinvest at least some of their profits in their workers, what steps can the government take to fill that void?

On the YouTube posting of the video below is the explanation:

Senator Elizabeth Warren’s Q&A at a September 17, 2014 Banking Subcommittee on Economic Policy hearing entitled, “Who is the Economy Working For? The Impact of Rising Inequality on the American Economy.”

The witnesses included: Ms. Heather McGhee, President, Demos; Dr. Amir Sufi, Professor of Finance, University of Chicago; and Ms. Claudia Viek, CEO, California Association for Micro Enterprise Opportunity (CAMEO), and Dr. Adam Hersh, Senior Economist, Center for American Progress.

Pay particular attention to the remarks of the final panelist, Dr. Adam Hersh. He finally speaks to the issue of this economy that I refer to as “What part of no freakin’ customers do you not understand?”

And I think there is a very simple answer to your question of if the private sector is not willing to invest even though the corporate sector is holding more than $2 trillion in cash reserves even though they can borrow billions at essentially zero interest rates right now and are sitting on this cash rather than doing something productive with it. If they are not willing to invest, then the public sector has the role to step up and invest. There is no shortage of public goods and public services investments that will increase the productive capacity of the US economy and create jobs that will lead to rising incomes and aggregate demand that will then crowd in investment from businesses. When they see a growing market, the investment will come to serve that market. And while we are in this time of high unemployment and high excess capacity in the productive economy this is the rwally the way that we are going to get out this spot.

My point is that if there are not enough customers for what companies can already produce, then why are you so surprised that they are not investing in making more stuff? Geepers, people, wake up.

This is the kind of discussion that would have prevented the Tuesday night massacre had Obama and his administration been focusing on these ideas for the last 6 years.

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