In 2010 a European industry is developed

The crisis is like a tree. Out of the ground in 2007, she suddenly grew in 2008. In 2010, a European industry is developed. Financial and economic ramifications, pushed. This entanglement is "The tree without end", a beautiful book for children of Claude Ponti. And at the foot of this tree, economists search for the roots of a plant such as Monster. They started by the more obvious - the delusions of the bankers, the unconsciousness of their controllers. They were pursued by major imbalances (between countries, and some like the US) which resulted in the creation of an overwhelming mass of liquidity. Then they descended to the debts accumulated by individuals. But where does this debt In his latest book (1), the Economist Robert Reich widening still further. For the former Secretary to Bill Clinton's work, which is one of the most insightful observers of the modern economy, the real root of the crisis is the rise of inequality.

The reasoning is simple and dense! "Mass production must be accompanied by a mass consumption, and this mass consumption implies in turn a distribution of wealth as it ensures men a purchasing power equivalent to the amount of goods and services offered by the productive apparatus." Instead to ensure such a distribution, a giant suction pump had confiscated an increasing share of the wealth produced for the benefit of few. Well, they had accumulated capital. But by denying the mass of a sufficient purchasing power for consumers, savers themselves had dried up the application which would justify their capital reinvestment in new plants. Therefore, as in a poker game where tokens would be concentrated between players less numerous, others could continue the party only by borrowing. When their credit wore, the party ceased. "This (slightly abridged) quote appears in the book of Reich. But it was written 60 years ago by a certain Marriner Eccles. In his memoirs published in 1951, the mormon banker named at the head of the Federal Reserve of the United States Franklin Roosevelt analysed the crisis of the 1930s. And he was found worthy to give his name to the building which today houses the Fed.

Fatal engagement of the 1920s is reproduced in the 2000s. An increasing share of the income went to the privileged. "The share of income from 1 of the richest taxpayers peaked both in 1928, and in 2007, with more than 23 percent" against less than 9 by the end of the 1970s. The drama of the rich, it is that they do not all spend, despite their efforts. Their "propensity to consume", in the words of John Maynard Keynes, is lower than that of the poor. When their share of the cake increases, it consumes the consumption, the demand and therefore growth.

However, from the 1980s, the American middle classes fought against "effects simultaneous and devastating global competition and of technologies that can replace human labour", which compressed wages. They employed three means to increase their income. First, women entered the labour market (in a generation, the proportion of young mothers employed rose from 20 to 60). Then, the assets have worked more (five to six hours per week in thirty years). Finally, the Americans have borrowed heavily. But "when their credit wore, the cess part a" once again.

In these conditions, America will have difficulty to really overcome the crisis, because the revenue sharing has changed little. Wages stagnate and the number of employees decreased by 7 million in three years. Mass consumption cannot follow the mass production. The country will not remove an excess of debt (private) by another (debt) excess. To get out Robert Reich appealed to what he called a new founding pact, to rebalance the distribution of income and find the path of sustainable growth. A Covenant asserted by economic policy measures: subsidize employees affecting less than 50,000 per year (the equivalent of 3,000 euros per month), taxing carbon, increase the high income tax (in the post-war decades, the marginal tax bracket exceeded 70 without impeding growth), eliminate the policy money (to avoid that the rich do vote laws which are favourable).

But a public Pact will not suffice. It must also be private. This is what happened after the 1930s. In the footsteps of Henry Ford, the companies had increased wages, which had boosted demand and created a virtuous circle. Strangely, Robert Reich said Ford's action without the lessons. French observers, which are the same analysis of the crisis, do not hesitate to do so. In a note published last month, Patrick Artus, the Natixis Bank Chief Economist, said, "be a banking and financial crisis the almost continual crisis in which we live is a crisis of the sharing of revenues in the United States, and therefore the profitability of the capital requirement". It joins the diagnosis of American guru Michael Porter management, which provides the "shareholder value" (shareholder value) to the "shared value" (shared value). But failover is possible It is the ultimate paradox of this story: by sharply lowering interest rates, widening budget deficits, according to the Keynesian vulgate, rulers have prevented the worst. And in preventing the worst, they have private capitalism, its ability to reinvent itself.