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The cause of retail and asset price inflation is by definition and accounting identity rent-seeking - ie the demand for profit/rent in excess of cost.

An estimate that sticks in my mind is that 30% of the price of everything today in the USA is due to rent paid to the financial sector. This is probably larger than the effective government tax rate from all levels of government combined, and, in its effects, it is additive. So people, other than those on the receiving end of this flow, have to make do with the 40% of their income remaining to them. The synergy in this case is that the government serves as both tax collector and as the enforcer of the arrangements that enable the financial sector to continue charging such exorbitant rent.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sat Dec 22nd, 2012 at 01:02:25 PM EST
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