Capital Gets its Return

“Money makes money,” said Benjamin Franklin, “and the money that money makes, makes money.”

That might be the shortest economic history of the past 40 years of U.S. policy and society. Once wealth starts flowing uphill, math dictates that it will flow faster and faster if unchecked. And when you compound policy choices and circumstance along with interest, the results get even starker.

By now, the results are staggering. Every American should study those charts (from the St. Louis Fed) and ask themselves, Who and what is this society really for? What’s the promise, and how are we measuring?

Meanwhile, the math hasn’t changed (of course), and both policy and circumstance have tended to reinforce existing trends.

I can’t think of a way out other than to change the math, which means changing the policy.