As an aside, according to Agence France Presse, the Labor Department just reported that Americans on average saw income decline for the second straight year in the 12 months.......
“The average pre-tax income fell 0.9 percent from the same period a year earlier, to $64,432. But broken down into quintiles, those in the top 20 percent of incomes saw their money stream grow by 0.9 percent to $166,048 on average. Every other group lost ground, with the bottom 20 percent losing the most: their average income dropped 3.5 percent to $9,818.” These are facts, and they don’t depend on any starting points, as Shaoul maintains.
It is commendable that the Fed has decided to sponsor more research on wealth and income inequality — and is well understood 20 years after income and wealth inequality began to increase sharply.
Now, we at least know what Fed chair Yellen means when she says that the Fed’s policies are “data dependent.” (William Dudley commented in regard to increases in the Fed Fund rate: “How we react after lift-off is going to depend on the market reaction that we get.”)
But I shall now get to the point I really wanted to make about Fed- sponsored research and the Fed’s consultants. I am on the board of several companies and I am amazed at the number of consultants, lawyers, accountants, and auditors a company has to employ in order to be compliant with all the regulations. Similarly, a fund manager has to spend an enormous amount of time in order to be recommended by consultants such as Cambridge Associates.
Now, it seems to me that this entire consulting business is largely driven by increasingly complex laws and regulations, which frequently change, as well as by people who are no longer willing to take personal responsibility for their actions.
In fact, people frequently cannot assume responsibility for taking their own decisions, without employing consultants to do so on their behalf, simply because they would then open themselves to the potential for some serious litigation by disgruntled shareholders or government regulators.
But, as the American poet and essayist Adrienne Cecile Rich (regarded as one of the most influential poets of the second half of the 20th century) opined, “Responsibility to yourself means refusing to let others do your thinking, talking, and naming for you; it means learning to respect and use your own brains and instincts; hence, grappling with hard work.”
My point is this: Regulation an a jungle of laws increase the cost of doing business significantly and are stifling overall economic growth.