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RE: Economic graph of the day #5. Worker's share in global wealth
There's also another driver for the gap in that graph: credit. Without the credit-binge of the past 30 years, none of these manufacturing booms and capital appreciations would not have been sustainable for very long!
And that credit bubble is coming to an end now. This is why the central banks have been propping up the markets with never-ending injection of credit! They know the jig is up! The Western populace is up to their eyeballs in debt.
Well, credit expansion is a factor, who would argue. While rates lowering, capital allocation shifted to industries with less marginal returns. But growth of capital also boosted overall productivity and wages.
Considering credit bubble, it won't going to an end. From now on it will be permanent. So what - Japan lives in credit bubble for 30 years now.