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Posted by on Jun 9, 2011 in At TMV | 5 comments

Sick COW Syndrome Is The Root Cause of America’s Economic Decline

COW is short for concentration of wealth. The ever increasing wealth in fewer hands is perhaps the greatest single factor explaining this country’s economic decline.

While most liberals are quick to characterize a growing COW in a totally negative way, however, this misses the really critical point. It’s not the size of the COW that’s the problem. Not that our COW has gotten too fat. It’s that we have a sick COW.

Wealth concentration is vital to economic growth and general economic well-being. You have to appropriately compensate society’s most talented economic players to have a vibrant economy. Surplus wealth also has to be concentrated in a few hands in order to have the available investment needed to bring new and better products and services into being.

The fact that the COW on these shores is getting fatter is therefore not necessarily a bad thing. Indeed, if we had a healthy COW, if this concentration were actually doing what it was supposed to be doing, it would make everyone’s economic lives and prospects better.

Alas, this concentration is not doing what’s it’s supposed to do. As this COW has fattened, it’s also sickened. The result is an economy that has sickened in tandem.

How do I know this? Need we engage here in a scholastic-style economist debate on the subject, with me pitting my authorities against opponents’ authorities, with the biggest and best authorities declared the winner? Not necessary. A lawyer loses every case, she’s not a good lawyer. A doctor can’t diagnose you properly, he’s not a good doctor. The same common sense, obvious view prevails with COW.

If we had a healthy COW, there wouldn’t be pervasive high unemployment and fewer good jobs for those who are employed. The quality of our educational system would be waxing instead of waning. There would be huge amounts of capital flowing into maintaining existing infrastructure and developing more advanced forms. Newer technologies, especially of the green variety, would be adequately funded. None of this is happening to a sufficient extent, one that makes for growing prosperity for most Americans today, and guarantees future prosperity.

Who, then, is sickening this COW? A number of perps come to mind. But the main sickener is the market mechanism chiefly responsible for allocating concentrated private wealth — Wall Street.

Yes, The Street in its numerous guises is doing a lot of worthwhile allocation. But far, far too much is being siphoned off on self-serving Wall Street games by Wall Street gamesters. Games that don’t lead to a healthy trickle down. The worthless binge stock trading. The trillions sunk into derivative insurance products that do nothing but insure other derivative insurance products. Hedge fund bets that only profit if they impoverish a whole industry or an entire nation. Sickeners of the COW pool that enrich the few without the sort of Gilded Age spinoffs that with all their attendant nastiness at least generated work and a better lifestyles for so many others.

So here’s the thing to keep in mind when it comes the COW. Forget the old class warfare blather. There’s nothing wrong with a lot of a mega-millionaires and billionaires. But there’s something terribly, terribly wrong when the primary mechanism for allocating our national wealth is not being handled by skilled wealth physicians, but by greedy quacks.

Reform Wall Street to save the economy. Don’t kill the COW. Don’t even thin it out. Just heal the beast and we’ll all feel healthier in consequence.

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