Whenever labor’s share of income rises a bit, they hold a recession [View all]

[HiPointDem]

So all you economists out there, tell me why this doesn’t show what I think it does: whenever labor’s share of income rises a bit, they hold a recession. Which takes care of that problem quite nicely.

http://stopmebeforeivoteagain.org/2013/02/riddle-me-this-batman/


Dunno about the hypothesis in general, but I'm personally convinced that the Volker recessions were caused knowingly and deliberately, and specifically to crack down on labor and weed out small businesses.

”… as profit rates fall in the productive sectors of an economy, capitalists begin to shift their investable funds out of reinvestment in plant, equipment and labour power, and instead seek refuge in financial assets.

To fulfil their new role as not only store of value but as investment outlet for overaccumulated capital, those financial assets must be increasingly capable of generating their own self-expansion, and also be protected (at least temporarily) against devaluation in the form of both financial crashes and inflation.

Such emerging needs mean that financiers, who are after all competing against other profit-seeking capitalists for resources, induce a shift in the function of finance away from merely accommodating the circulation of capital through production, and increasingly towards both speculative and control functions.

The speculative function attracts further flows of productive capital, and the control function expands to ensure the protection and the reproduction of financial markets. Where inflation may be a threat, the control functions of finance often result in high real interest rates and a reduction in the value of labour- power (and hence lower effective demand).”

http://www.marxmail.org/faq/overproduction.htm