The era of wealth accumulation is over

Nearly four decades ago, the United States undertook the last major economic transformation of the developed world: the supply revolution.
Taxes on capital gains have been reduced. President Ronald Reagan and British Prime Minister Margaret Thatcher have taken command of air traffic controllers and coal miners. The power of the unions has disappeared and the power of the companies has increased. Some people have become very rich. But the level of inequality has increased and, finally, the general trend of growth has slowed down.
Looking at the preliminary debates of the Democratic presidency last week, I could only think that we could witness a next big change, from the era of accumulation of wealth to the era of the distribution of wealth. Moderates, such as Joe Biden and John Delaney, have tried to advocate for moderate answers on issues such as health care and trade.
But Bernie Sanders and Elizabeth Warren, who have similar views on everything from the transformation of Americans to the national health system by forgiving heavily indebted students, have adopted a highly publicized stance. Both also demanded higher taxes on the rich and tougher rules for businesses.
Although this does not seem extreme in many other parts of the world, in the context of American politics, this was a really new thing. The difference in the economic discussions, even for the Democrats, was how the government could help the markets work better. Now this is how the public sector can defeat it and reduce the cake more equitably.
Moreover, it's not just the Democrats. Some Republicans are also looking for a paradigm shift. Marco Rubio, an influential Republican senator who hopes to become president one day, has finally presented a paper on the problems of shareholder capitalism and the merits of industrial policy.
The signs of this new era, the post-supply era, surround us. Discover the rise of category B companies seeking a balance of purpose and profit, as well as the growth of investments based on environmental, social and governance factors.
In the government, he noted the growing enthusiasm of bipartite parties for tighter control of the monopoly and demands for trade protectionism, as well as efforts to politicize the US Federal Reserve. The tweet of President Donald Trump calls not only for a reduction in interest rates, but also for progressive Democrats who consider "modern monetary policy" as a way to pay for their priorities without the need for funding through 39, Congress tax increases.
These views are becoming more mainstream. Last week, two senators introduced a bipartisan bill that would force the Fed to devalue the dollar in order to increase exports and balance the current account with China.
Kirill Sokolov, founder of 13DGR, explained that it was not a passing populism, but something much more important, that was ahead in determining turning points, the supply-side economy and slowing down inflation that began in the early 1980s., the rise of China and the spread of smart phones. "What we are going to see is a backlash against the Second Doctrine," and that will have a tremendous impact on the world – and on the markets. "
A potential impact will be the fundamental changes in the possession of wealth. The democratic race reflects the growing conflict between the two major voting groups in the United States – post-war births represented by candidates such as Biden, and Generation Y who supported Sanders in 2016 and now support candidates like him and younger like Pete Bettigg. A decade of loose monetary policy yielded the first group, which saw its assets grow at the expense of the second group, which could not afford to pay for housing costs.
A major political battle will be to determine who gets what percentage of what appears to be a slow growing share of what appears to be a slow growing economy.
Another battle will be between capital and labor. Higher wages cut some of the profit margins of American companies, frankly, it should. When consumer spending accounts for 70% of the economy, we need a bit of wage inflation so that people have the money they need to spend. This is particularly true at a time when governments are not investing and where the shift from the physical to the intangible economy has led to a decline in private sector capital spending.
But it took billions of dollars of unconventional monetary policy to prepare for relatively small wage increases. For many Americans, these increases were absorbed immediately by increases in health care costs, or prices of prescription drugs, which are also exciting field trips. This is one of the reasons why widespread support is in favor of a tax increase for the rich.
It remains to be seen when and how the tax increases will be. But the era of wealth distribution is approaching and will have major implications in terms of investment. The value of US stocks may have peaked and solid assets such as gold, other commodities and even housing in the art – all that is in constant stock – could be more beneficial than equities and multinational debt.
This is not the end of the world – we have gone through cycles of wealth accumulation and constant distribution. But that means the rules of the road for investors are changing. Some asset prices may fall, but potential revenue growth will be higher. This will have a particularly positive aspect, both economically and politically.
* The first doctrine, which took place between the Civil War and the First World War, witnessed rapid population and economic growth, during which political corruption and business fraud took place. have been generalized.