I can't believe you repeat this 1930s faddish garbage with a straight face. That garbage is theory of underconsumption, and FDR's belief that increases in workers' wages will stimulate consumption.
The answer is very simple. A company creates a pie (product). If you pay more to unions, there is less for the shareholders. The total consumption stays the same and EQUAL to the pie created (if part of it is not reinvested). The same is true for the economy as a whole: one sector may appropriate a bigger portion of the pie, but that does not change the size of the pie to be consumed.
I can't believe you repeat this 1930s faddish garbage with a straight face. That garbage is theory of underconsumption, and FDR's belief that increases in workers' wages will stimulate consumption.Sure, but if *too much* goes into capital you're just as screwed. You can't have supply without demand, which is exactly where the US economy is today.The answer is very simple. A company creates a pie (product). If you pay more to unions, there is less for the shareholders. The total consumption stays the same and EQUAL to the pie created (if part of it is not reinvested). The same is true for the economy as a whole: one sector may appropriate a bigger portion of the pie, but that does not change the size of the pie to be consumed.
There's always a push and a pull both ways. The US is weird, because American consumers are tapped out. What can we sell to China and India that they can't pirate? Services and IP only matter if your trading partner respects them.