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In the case of Greece, government actions and regulations also lie at the heart of what threatens to be a European financial crisis.

This risk is amplified by special rules created by politicians that encourage banks to lend freely to governments.

Here’s how it works. Governments require banks to hold capital against the loans that they make, anticipating that in the normal course of business, some of the loans will not be repaid.  The riskier the loan, the more capital that needs to be held in reserve. However, under international rules negotiated by government representatives through the Bank for International Settlements (BIS), government loans fit into a special category that has a 0% risk requirement.  That means European banks do not have to hold any reserves against loans they make to European governments.  That’s right, politicians implicitly promised banks that governments would never default.  And, given the opportunity to make “risk free” loans that require no capital commitment, bankers purchased mountains of government debt.

o get my vote on the debt ceiling..Medicare will be a part of it

argued against using $80 billion in taxpayer dollars to try to save General Motors Co., Chrysler and many of their suppliers."

economy

he ownership rate is now back to the level of 1998, and some housing experts say it could decline to the level of the 1980s or even earlier

Cutting tax breaks for retirement won't raise a lot of money;

economists largely predicted the U.S. recovery would ramp back up as short-term disruptions such as higher gas prices, bad weather and supply problems in Japan subsided

medical school free

Bottom line: Despite genuinely booming imports, trade flows still kept dragging down America’s growth and employment performance, and still kept boosting the country’s debt burden.  Do these trends really deserve the label “recovery”?

tax transfers to the upper-middle class

$400 a year

tuition fees as tax deductions

denies universities the tuition money that they need

As lower-paid workers have seen their incomes stagnate or even fall, the highest-paid workers have gotten steep raises.

Globalization has had an impact, as rich countries have been sending more of their commodifiable, generally less-skilled jobs offshore, which has displaced many lower-paid workers in rich countries.

Besides outright layoffs, there have also been cuts in work hours (sometimes voluntary, sometimes not), disproportionately affecting lower-paid employees:

Today, across developed countries, the average income of the richest 10 percent of the population is about nine times that of the poorest 10 percent, with much bigger multiples in Israel, Turkey, the United States, Chile and Mexico. In these last two countries, the income ratio is 27 to 1.

Technological improvements have also disproportionately benefited the pay of high-skilled workers. Regulatory changes, like loosening protections for temporary (and less-skilled) workers and lower unemployment benefits, may have also had an effect.

Over the years people have become more and more likely to marry mates who have similar incomes. “Today, 40 percent of couples in which both partners work belong to the same or neighboring earnings deciles, compared with 33 percent some 20 years ago,” the report says.

Surely to some extent this has to do with more women having earnings, period, and therefore having more women’s earning matching what their husbands make. But in any case if poor marry poor and rich marry rich, that magnifies the income gap effect. After all, if poor married rich, the result would be more evenly distributed wealth.

We have to remember that Korea is a very price sensitive market and the fact that there’s no plan for Canada to have a free trade agreement.

large scale international capital flows would be associated with the prominence of large international ventures which again could distribute a lot of winnings to a comparatively small (in societal terms) number of beneficiaries.

Whether these shifts were good or bad depends on your political persuasion. Those on the left lament the gaps, often forgetting that the greater income disparities have created bigger incentives to get an education, which has led to a better trained, more productive workforce. The share of American workers with a college degree, 20% in 1980, is over 30% today.

the focus should be on giving everyone a an equal chance to be successful. This might mean making the tax code less regressive by expanding the earned income tax credit, eliminating tax subsidies to the rich, and improving access to quality education.