Inclusive Capitalism? The current system of interventionism and cronyism will not cure our economic woes

By Jay Bowen of FEE. Excerpts:

"As the economic recovery from the financial crisis continues to disappoint on a variety of fronts—particularly job creation and real income growth—calls for a more inclusive capitalism grow louder. A chorus of critics is particularly obsessed with what they perceive as an increasing inequality—of both income and opportunity—that the current system has wrought.

Income inequality has indeed increased over the last five years, primarily because of the sharp rebound in stocks (the market is up 200 percent since the depths of the downturn). But most measures of income inequality do not take into account taxes, social welfare transfer payments, or non-cash benefits such as health insurance and pension benefits. When these factors are considered inequality actually decreased between 2000 and 2010, according to a Brookings Institution analysis."

"Government spending at all levels now accounts for 41 percent of our national income, and the heavy hand of government now directly or indirectly controls large swaths of our economy in important areas like healthcare and education. In the meantime, entitlement spending—a good proxy for redistributing wealth as opposed to creating it—has grown from 31 percent of the federal budget in 1962 to over 62 percent today."