If You Really Want to Close the Gap...

If you want to close the gap, you redistribute the money.

When Henry Ford doubled the wages of his workers, he did not redistribute his wealth. He redistributed the money.

"Wealth is what you have. Money is what you make."
Slim Fairview

What Henry Ford did was to launch the creation of the Middle Class.


What Really Created the Gap?

Some of the contributing factors to the wealth gap have taken place over the course of decades.

1.  Planned Obsolescence:  Forcing consumers to buy shoddy products to replace the shoddy products they bought the first time.

2.  Sending Jobs Overseas: Any one, two, or ten companies can outsource to cut costs to increase the bottom line.  However, as a national policy, this is bad.

No matter how much you cut costs, you won't sell a lot of Oldsmobiles in a country where people make $5, a day.

Witness Japan:  Japan sent jobs overseas.  The Japanese auto companies built Japanese cars in America.  They labeled the cars "Made in America". They sold Japanese cars to American consumers. (To American auto workers.)  The Japanese paid American workers American wages and still made a profit.  Those profits went to Japan.

"Those who forget history are doomed to repeat it."
Santayana.

"Those who remember history are able to repeat it."
Slim  Fairview.

The Japanese did what Henry Ford did.  Made it possible for American workers to afford to buy Japanese cars.

China also created a consumer class.  
China created an investor class.
China gave 800 million Chinese people a vested interest in the success of the Chinese economy.

3.  NAFTA :
NAFTA was bad for the Economy.
NAFTA cost American jobs.
NAFTA was a disaster.
Nancy Pelosi on 
Reliable Sources on 
CNN before the election.

4.  Conspicuous Consumption and the vulgar displays of wealth as consumers celebrated the lifestyles of the rich and famous.  (And embraces a television show by the name, Lifestyles of the Rich and Famous.)


SOLUTIONS:

Tax cuts for the rich to enable them to invest money doesn't work.  It can't work.

The American Widget Co. will not hire one additional Widget Maker until it has an order for one widget more than it can produce when operating at maximum capacity and optimal efficiency.

"If you grow faster than your market, you tie up capital. If your market grows faster than you do, you lose market share."
The Quotations of Slim Fairview (c).

Tax benefits to companies for increasing wages will do more to close the gap by increasing wages and benefiting the economy. Through increased economic activity business will recoup the outlay.  But there is a twist that will make this work.  That is why I wrote

Tax Policy to Increase Wages $5 an hour. Now!


Invest in people starting their own businesses because small businesses (SMEs) create jobs.

A worker makes a paycheck.
A worker with a raise makes a bigger paycheck.
The owner of a business makes a paycheck and a profit.

Profits grow the business.
The business hires more people.
and so on.

The Multiplier Effect

And this only scratches the surface.  The reality of the economic benefits will illuminate the rest.

Ascribed Value 

Limiting Demand

Another Hidden Inflation



Regards,

Slim


If you find anything here to be helpful, please don't hesitate to send me a really tricked-out Mac Book and to tuck a few dollars into the envelope along with the thank you note.
Slim.

Bob Asken
Box 33
Pen Argyl, PA 18072



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Robert Asken
All rights reserved.