Washington Blog: 'Extreme Inequality Helped Cause Both the Great Depression and the Current Economic Crisis'

Very nice article by this always interesting US blogger:

It is clear that when banks become too big, it harms the economy. Economist Steve Keen says that "a sustainable level of bank profits appears to be about 1% of GDP", and higher bank profits lead to a Ponzi economy and a depression.

But most mainstream economists dismiss the idea that wealth inequality among individuals causes economic crises.

Of course, some ideologues will argue that even discussing inequality is waging class warfare, and smacks of an attack on capitalism.

However, the father of modern economics - Adam Smith - disagreed.

And as Warren Buffet, one of America's most successful capitalists and defenders of capitalism, points out:

There's class warfare, all right, but it's my class, the rich class, that's making war .... 

And as I have previously noted, radical concentration of wealth actually destroys capitalism, turning it instead into socialism for the rich.

Is There a Causal Connection Between Extreme Inequality and Economic Crises?

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Read full article at Washington Blog.