Cosmopolites, Financiers, Monopolists, and the 2020 Election

By Karen Petrou

…foreign competitors get to make the goods, and we just buy them.
And then they buy up American companies with the profits.  And
yes, in this bargain there are lots of jobs—jobs on Wall Street, or in
Hollywood, or in Silicon Valley…At the same time, it has encouraged
multinational corporations to move jobs and assets overseas to chase
the cheapest wages and pay the lowest taxes.  And it has rewarded
these same corporations for then turning around and investing their
profits not in American workers, not in American development, but in
financial instruments that benefit the cosmopolitan elite.  And where
has this left middle America?  With flat wages, with lost jobs, with
with declining investment and declining opportunity.  We don’t make
things here anymore—at least, not the kinds of things a normal person
without a fancy degree can build with his hands.
Continue reading “Cosmopolites, Financiers, Monopolists, and the 2020 Election”

2020’s Equality Policies 101

By Karen Petrou

On July 18, the Economic Policy Subcommittee of the U.S. Senate Banking Committee turned its attention from the panel’s usual agenda to an unusual hearing on the challenges posed by U.S. economic inequality and what Congress might actually do about them.  For the first time, we saw a shared belief by senators on both sides of the aisle and diverse witnesses that, over the past two decades, Americans have become mired in the income and wealth into which they are born.  This isn’t exactly a news flash – see our prior blog posts on how unequal America has become and our most recent one on the dearth of public resources with which to counter fierce economic downdrafts.  However, it isn’t just that senators finally discovered inequality – it’s that the outline of a bipartisan response took shape.  Thus, for all the difficulty in Congress doing anything about even something as critical as economic inequality, the session was a break-out moment. Continue reading “2020’s Equality Policies 101”

Public Wealth and Private Worth: The Inequality Impact of Deficit Spending

By Karen Petrou

Progressive Democrats have recently touted modern monetary theory – i.e., that deficits don’t matter – to press social-welfare spending.  Similarly dismissive of deficits, the Trump Administration and many Republicans now cotton to giant trickle-down individual tax cuts.  But, deficits do matter not just for fiscal hawks, but also for equality advocates.  A new IMF study takes an unprecedented look at U.S. public wealth since 1946, concluding that lots less public wealth undermines the ability of fiscal policy to alleviate economic downturns.  Continue reading “Public Wealth and Private Worth: The Inequality Impact of Deficit Spending”

Do Credit Unions Give Credit Where Equality is Due?

By Karen Petrou

U.S. credit unions in 2019 are far from the proverbial church-basement financial clubs – now, credit unions are a $1.5 trillion sector of the U.S. financial industry.  Given the extent of the U.S. equality crisis, $1.5 trillion dedicated to affordable, sustainable financing would not only adhere to the 1934 statutory mission that binds credit unions to this day, but also make a heck of a difference for low-and-moderate income households.  Do credit unions in fact adhere to their mission and thus earn the sweeping tax and regulatory benefits taxpayers provide to encourage them to do so?  A new Federal Financial Analytics study* finds that credit unions sadly fall far short. Continue reading “Do Credit Unions Give Credit Where Equality is Due?”

The Good, the Bad, and the Ugly in American Well-Being

By Karen Petrou and Matthew Shaw

Yesterday, FRB Vice Chairman Clarida said that the U.S. economy is in “in a good place.”  However, The Fed’s new study of American economic “well-being” shows that huge swaths of the United States are struggling harder than ever before to make ends meet.  All but the most affluent Americans asked about how well they’re doing don’t feel anywhere near that good about it.  Combine this with new data on the evaporating American middle class and an ugly picture quickly merges.  In it, the prosperity in which the Fed takes such comfort rests thinly atop millions – indeed a hundred plus million – of Americans who are barely getting by at the height of the business cycle following a record-breaking “recovery.”  No wonder that so many Americans remain so angry about their economic prospects and why political polarization is sure to define the 2020 election at least as much as it determined 2016’s outcome.

Continue reading “The Good, the Bad, and the Ugly in American Well-Being”