We can end the recession without government intervention. All we need is for the U.S. Chamber of Commerce to get all the corporations who are siting on piles of cash to increase the wages of all Americans. This will end the recession by stimulating consumption and begin the long road to income balance.
Current debate over what will end the economic crisis we find
ourselves in has focused on the lack of spending by consumers and the
huge cash piles of corporations and their reluctance to invest.
Returning cash to investors in dividends has been a minor trend, while
stock purchases by corporations of their own stock has been the major
trend with hoarding the other. This strategy will not resolve the
crisis. The long period of lack of income growth in the middle class
and the rising inequality are the significant problems. As Adam Smith
noted, "No society can surely be flourishing and happy, of which the
far greater part of the members are poor and miserable." The ability
of the mass of the people to increase their enjoyment of life and share
in the prosperity they create was recognized by Smith, "The liberal
reward of labour, ...increases the industry of the common people."
Here is the crux of the matter. The 1% of the world's population does
not create the great wealth of modern society, it is small businesses
and entrepreneurs who risk their capital in new ventures. To do so
they must have capital and so the trend of wages must change.
Corporations, if they are incapable of new investments must increase
the pay of their workers to stimulate industry unless they want the
government to do it. New taxes on corporate cash piles could have an
effect if these means were able to effect overseas hoards as well as in
a unitary tax system as California had in the 1970s.