Economic recovery depends on spending

Welcome back to the Guardian’s agenda-setting Monday economic analysis page (Fat cats and how the wealth gap has been steadily widening, 28 August). It takes me back 25 years to why I first started to buy the paper. More of this would be most welcome; in particular, more on the sort of fundamental transformation that will be required to pre- and post-income regimes if the situation is to be reversed.

On the opposite page Natalie Nougayrède more or less encourages President Macron (as if he needed it) to show the French a bit of the tough love that was Thatcherism. In fairness, she does acknowledge that “In France, income inequality and poverty rates are lower than in Britain and Germany,” but does not speculate whether that would be the case if they had had a Thatcher or a Hartz IV, the German labour market reforms. Unemployment levels in France are undesirably high, but if you were unemployed in France would you be gasping for access to the conditions of the bottom 25% of the “employed” in the UK or Germany? Of course, it’s not the real choice that the French should have to make but that’s a longer story.
Jim O’Donnell
Brussels

• Larry Elliott gives us the up-to-date figures for the growing disparity in wealth in the US. The totals confirm Charles Murray’s 2012 assessment, Coming Apart: The State of White America 1960-2010. Marray’s findings were that educational attainment was the principal driving force of inequality. The well-educated clump together, through marriage and in excluding communities. The less-educated are left out-of-sight and out-of-mind in deprived communities.

In Britain, this separation is most easily seen in housing and in the disparity of living standards between the extended London area and the rest of the UK. A change in taxation is only a simplistic political solution to a problem that arises from the way we have allowed society to develop. If we rely on taxation to fill the gap, we will end with a society where it is usual for part to live with the benefits of the modern world, and part that can only look at pictures of the unattainable. We need to start with an education system that prepares citizens for life in a world in which they can expect to live, and a working environment that enables them to afford to live there.
Martin London
Henllan, Denbighshire

• As so often with discussions about inequality (Editorial, 29 August) your leader hones in on unfairness rather than how extremes of inequality are among the main drivers of boom and bust syndromes. As we’re seeing at the moment it also adversely affects the ability of an economy to recover from the bust. Herbert Hoover in the three years after the Wall Street crash of 1929 and the Tories since 2010 failed to recognise what Galbraith concluded. The rich cannot buy great quantities of bread. Excess wealth leads not to useful job creation but to useless speculation where the assets (particularly property) are divided from the rest of us. Recovery is sparked by the ordinary citizen with the money and the security to spend it, buying the goods and services which keep the economy ticking over. If City speculators, property developers, overpaid CEOs and greedy shareholders were going to kickstart the economy they would have done so by now.
David Redshaw
Gravesend, Kent

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