Consumer demand for cable TV is growing! Demand for cellular service is growing too. That's not cannibalistic. It's not a zero sum game.
Perhaps you didn't understand what I was saying. Demand across the board is not growing, or not growing significantly compared to population growth. That being the case, it IS a zero-sum game. I don't deny that demand for cable TV is growing, but if that's true, then it means that demand for other products is shrinking, as that is the only way growth in demand for cable is compatible with sluggish demand overall.
Absolute consumer demand, not consumer demand rates. There is still today an escalating demand for consumer products because the population is increasing.
Everything really should be normalized for population growth or decline. That's why I like to use growth in per capita GDP as the correct measure rather than growth in aggregate GDP.
There was one, yes. It was brief and mild. It followed after the immediate postwar boom, and proved an unimportant hiccup in the prosperous decades that followed.
You, by yourself, are not able to keep someone's wages down. This requires collective action and the main culprit is the government, at the behest of big business. Nevertheless, you profit by the fact that wages have been kept down -- except that, if you're a small business owner, most likely the loss of consumer market is hurting you more than low wages are helping.
To use a more relevant illustration, if innovations in production methods allow your employees to double productivity per person-hour, then they should have a 100% raise. (Of course, you, by yourself, can't be expected to do this -- your competitors would eat you. It has to be economy-wide.) Otherwise, over the whole economy, buying power will not keep pace with productivity, and we will run into the problem we're experiencing now.
An alternative to a 100% raise would be a 50% price cut -- same thing in effect. Or some mix and match of the two. But what's actually happened is that all or most of the gains have gone to the top. That's unsustainable.
Most manufacturing unions are still in place. The reason that unions have declined in strength is because manufacturing jobs have been lost to a combination of automation and outsourcing, and the service jobs that have replaced them have not been unionized, due to hostile government policy that makes it harder to do this.
Unions are not "pricing themselves out of the market." Consider that the wages for outsourced labor in some third-world country typically run ten percent or less of their American counterparts. This is not a wage that Americans can survive on, and there is no way that American workers can compete. The difference between union and non-union wages is trivial by comparison.
There is not less demand for "relatively unskilled labor," because that describes a lot of service work. There is, however, less bargaining power on the part of workers. Manufacturing work used to pay shit, too -- until industry was unionized.
The tax system HAS been flattened, and the total share of taxes paid by the upper end has increased ONLY because the total share of the income of the upper end has increased EVEN MORE. The percentage of their income paid by the very rich has gone down, not up, and that, not what percentage of the total tax revenues they pay, is the relevant statistic.
From 1940 to 1980, real per capita GDP grew at a rate of approximately 4.25% per year. From 1980 to the present, it's grown at a rate of just over 2% per year. If the economy had continued to grow at 4.25% per year, it would now, after thirty years, be 1.5 times as big now as it is, approximately. The pie is smaller because of the policy shift, but the share of it taken by the very wealthy is larger.
Oh, yes, but you're missing the important point here. Why was it necessary for all that credit to be extended to consumers in the first place? Because they weren't being paid enough to buy enough to keep the economy growing WITHOUT borrowing, or by borrowing responsibly (e.g. for big purchases like cars or homes).
Using what means? Taxation? Stifling innovation?
What happens to my employees when I'm told I cannot make more money?
Taxes on the rich do not stifle either innovation or investment; that's a myth.
The most effective way to redistribute wealth downward, to answer your question, is by driving wages up. This can be done through a combination of changed government policies to more aggressively enforce labor rights, changes to tax structure and banking regulation to steer investment into productive enterprises instead of financial shell games, and a short term massive government stimulus program to get the ball rolling. That's exactly how the Great Depression was brought to an end and four decades of unprecedented prosperity inaugurated.
Wow! When has more government control over the economy ever produced these results? And what is the benefit of overpaying anyone?
1940-1980, as I said. As for "overpaying" anyone, obviously the contention I'm making is that at present, most people are seriously UNDERpaid. My measure for that is that they aren't being paid enough to generate the consumer demand needed for real prosperity.
