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Economist Says Government Policies are Hurting the Economy

Our economy is promoting the hoarding of cash and assets at the top

July 30, 2015 2:00AM ET

by David Cay Johnston   @DavidCayJ

Around the world, financial pages report that the global economy is slowing and might even contract.

Prices of commodities are falling, with copper, cotton, grains and oil all down by about half in the last five years — a strong signal of slowing growth.

Companies are tightening their belts, with fewer perks and fringe benefits. An inadvertently leaked report showed that staff economists at the Federal Reserve are more pessimistic about the near future than the official Fed positions. And big companies with nowhere else to put their piles of cash are buying back their stock or buying up competitors, which means fewer well-paying management jobs.

Yet hardly any of these reports citing official sources and economic data connect the dots to outline what’s behind this unwelcome trend in the U.S.: government policies.

Governments are helping big industries by diminishing competition, providing abundant cheap credit for speculation rather than investment and failing to rein in price gouging. In turn, these policies produce a growing concentration of income and wealth at the top while the vast majority struggle with falling wages, flat incomes, job insecurity and a shrinking slice of investment assets.

Highly concentrated ownership

U.S. economic malaise has been clear for some time.