by John Mauldin
Growing income and wealth inequality were on my (and probably your) radar screen long before COVID-19 came along. The pandemic has made them both more obvious and more urgent. The actions by the Federal Reserve have widened the gap. We are now in a situation where society’s upper echelon can easily stay safe and prosperous while the lower segments live precariously and dangerously.
It’s actually worse than that. The upper end is safe precisely because millions of “essential” workers are producing and delivering the goods we need, placing themselves at risk in the process. That’s always been the case to some degree. Now it is clearer, and the stakes are higher.
Two weeks ago I talked about Peter Turchin’s idea of “elite overproduction” leading to social and economic crisis. What I read sounded disturbingly like our present situation. Further reading wasn’t any more comforting. While he doesn’t have any solutions, Turchin helps illuminate how we reached this point. Today we’ll go a little deeper and think about the implications. As you’ll see, there are many.