By Karen Petrou
Perhaps nothing is as startling about the 2020 election as the bad calls pollsters made up to the minute votes were counted. One might have thought all the mistakes that led to similar 2016 gaffes were corrected – pollsters certainly said so – but they weren’t and the reason why is sad, but simple. The political-science models on which polling is premised are, like monetary-policy models and so much conventional wisdom, predicated on the vibrant U.S. middle class that once was but is no more. As we showed early on the economic inequality blog, economic inequality breeds not just acute political polarization, but also a strongly right-leaning shift in voter sentiment. No wonder – American voters denied the iconic promise of modest economic security and inter-generational mobility are angry. The more they see prosperity enjoyed by only a few and often a progressive few at that, the angrier they get. Add in COVID, and this is a witch’s brew of economic despair, social anger, political polarization, and national instability.
Continue reading “How Inequality, Not Polling, Predicted the 2020 Election”
By Matthew Shaw and Karen Petrou
Every three years, the Federal Reserve releases a unique, illuminating data set, the Survey of Consumer Finances (SCF). The most recent report covering 2016 to 2019 comes at a time of acute political risk for the U.S. central bank due to growing demands for a third, “racial-equity” mandate and heightened recognition of the inequality impact of post-crisis monetary policy. Perhaps for this reason, the Fed’s qualitative release and much subsequent media coverage highlighted what the Fed described as meaningful reductions in both wealth and income inequality. Would it were so – percentages sometimes work in the Fed’s favor, but real dollars in people’s pockets, or the acute lack thereof, don’t.
Continue reading “The Dollars That Make a Difference: Results of the New Survey of Consumer Finances”