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MORE BAD NEWS FOR THOMAS PIKETTY P > G TOO!

In UT OH, SOMEONE BETTER TELL THOMAS PIKETTY ABOUT L > G TOO, I show how the growth in compensation to labor often outstrips the growth in the economy.

In THOMAS PIKETTY, 696 PAGES OF FOOLERY DESTROYED IN LESS THAN FIVE MINUTES, I show the deep flaws in Piketty's thought, flaws of false premises leading himself to false conclusion.


Now, I reveal the latest bombshell.

Piketty writes his doomsday pronouncement as R > G by which he means "the past devours the future." Other than being French, socialist-leaning and an academician with no business experience, Piketty believes that if the return to capitalists grows faster than the economy, we're all dooomed.

What Piketty fails to get is that capitalists get paid from profits, after all other bills get paid, including taxes to politicians and wages to workers.

Piketty doesn't get this inescapable fact of reality precisely because he is an academician who lives in the pretend world of economics rather than being a man of commerce and industry who lives in the reality of trade.

So what is the bombshell you ask? Ready?

Riffing off Piketty's inequality, I have shown the return to laborers often grows faster than the economy, or L > G.

And now I give you, P > G! That's right.

Here is the year-over-year growth or decline in GDP, compensation to laborers, return to capitalists and spending by politicians. As you can see, in the early years, spending by politicians outsized the economy to such a degree, the rest of the chart is hard to read.




And here is the chart of the same data transformed by log scale so all can better see what is going on.




In 41 of 85 years since 1929, spending by politicians using taxes to fund borrowed cash and credit has grown faster than the economy. Written Piketty-style, P > G.

In 26 of 85 years, spending by politicians grew faster than the economy while compensation to laborers grew slower than the economy! In 23 of 85 years, spending by politicians grew faster than the economy while return to rentiers grew slower than the economy.  Even worse, in 27 of 85 years, spending by politicians grew faster than the economy while return to entrepreneurs grew slower than the economy!

In a whopping 83 of 85 years, spending by politicians as a share of GDP was bigger than either the share of GDP returned to rentiers or the share of GDP earned by entrepreneurs. You would have to go all the way back to 1929 - 1930 for when pols spent less that rentiers or entrepreneurs earned.

You would need to go back all the way to 1951 for when the last time politicians spent less as a share of GDP than capitalists earned.




Once again, during the Reagan-Clinton prosperity (1986-1999), when spending by politicians grew much less than the economy, the economy boomed a prosperity came to all.

And once again, Piketty's pipe dream of more taxation and more spending by politicians would be poison rather than medicine.

For more on the Reagan-Clinton prosperity, check out PARTY OVER OOPS OUT OF TIME. YOU SHOULD HAVE PARTIED LIKE IT WAS 1999.

PIKETTY, THE USEFUL IDIOT

Piketty wants to curtail capitalism, remove competition among capitalists in their fight to buy shares of profit from entrepreneurs. Piketty wants to make it easier for the biggest capitalists who would remain standing in Piketty's Dystopian future masquerading as Fairness-Rhetoric Utopia.

If Piketty were to get his way, the western world would move ever closer to a neo-fascist, neo-feudal system. Individualism and freedom would at long last get crushed by the power elite.

Piketty is dangerous, especially dangerous to the wage-earning working man.




For the other articles which school Piketty, read

UT OH, SOMEONE BETTER TELL THOMAS PIKETTY ABOUT L > G TOO

and

THOMAS PIKETTY, 696 PAGES OF FOOLERY DESTROYED IN LESS THAN FIVE MINUTES.