Economic Populist: The real reason for the economic crisis
So what does this all mean? It means that the reason for the economic crisis was the asset bubble that preceded it. The ‘wealth effect’ was a lie.
The reason for the asset bubble was monetary inflation that got directed almost entirely to the wealthy. They naturally used it to become wealthier, which means stocks, bonds, and real estate. The trickle-down theory is a lie.
The reason why the monetary inflation was directed to the wealthy is because free trade agreements which gutted the income of the working class and left the nation suffering from economic disparity. The promises made by free trade proponents was a lie.
In essence, the economic crisis that we are suffering from, and will continue to suffer from, was caused by too much concentration of wealth in the upper class.
The country will continue to suffer from these bubble and bust cycles until either the nation addresses the income disparity, or the rest of the world stops offering to buy our debt.