By Matthew Shaw and Emma Palley
Continue reading “Why Ultra-Low Rates Don’t Benefit Ultra-Strapped Consumers”
- The more precarious a household’s financial standing, the more it must spend on basic financial services as a share of its income.
- Minority households continue to face substantial disparities in access to and the cost of basic financial services, putting them also at greater risk due to reliance on unregulated entities.
By Karen Petrou
- Distributional data show clearly that, fiscal stimulus notwithstanding, the U.S. was still more economically unequal in 2020.
- Only fiscal policy once combined also with progressive financial policy will put the inequality engine into reverse.
As we have noted before, the Fed’s new Distributional Financial Accounts of the United States (DFA) is a definitive source of economic-equality data we hope the Fed will not just compile, but also use for policy-making purposes. The latest edition of the DFA demonstrates yet again why distributional data are so compelling, showing now the profound challenge even unprecedented fiscal policy on its own faces slowing down the inexorable engine of inequality. Still more fiscal stimulus in 2021 will boost absolute income and wealth numbers a bit at some benefit to low-, moderate-, and even middle-income households. Still, the upward march of financial markets powered in large part by Fed policy inexorably widens the inequality gap. No matter the “crust of bread and such” from fiscal programs, inequality still increases the slow pace of economic growth, the risk of financial crises, and the odds that the electorate will be even angrier in 2024 than 2020.
Continue reading “Fiscal Policy’s Futile Equality Expectation on Its Own”
By Karen Petrou
- Judging U.S. rulemaking by its benefits to the public good, not just by its impact on private wealth, is transformational and, with a new CBA methodology, also more than possible.
- Equitable rules can be both effective and efficient.
- Maximizing the public good is not synonymous with redistribution or reverse discrimination.
In 1993, President Bill Clinton issued Executive Order (EO) 12866, creating hurdles ahead of federal rules that are “economically significant.” This was measured by a cost of $100 million or more. On January 20, President Biden began a long-overdue rewrite, stipulating that federal rules are henceforth to be judged not just by their impact on private wealth, but also by what becomes of the public good.
Continue reading “Rules We Can Really Live By”