By Federal Financial Analytics
FedFin has just released a new policy paper laying out how emerging risks in unregulated tech-based financial products may threaten U.S. economic inequality. It’s not that regulated institutions have always done that much better, but rather that the power of big data, predictive modeling, and far-flung commercial interests combines with tech-firm culture in still more dangerous ways far outside the reach of effective controls or meaningful enforcement. Continue reading “Making “Responsible Innovation” a Reality: Big Tech, Small Money, and U.S. Economic Equality”
By Karen Petrou
On January 22, Rep. Carolyn Maloney (D-NY) and 18 senior House Democrats reintroduced legislation (now H.R. 707) requiring federal statisticians to provide an equality-focused insight into the gross domestic product (GDP) number all too often considered the arbiter of American prosperity. Senate Minority Leader Schumer (D-NY) and Sen. Martin Heinrich (D-NM) introduced the same bill last year and are sure to do it again and, then to join Maloney in pressing for action. This time, it will come quickly in the House and may well pass the Senate in this Congress. Would it make an equality difference? No, but at least we’d know more clearly how much trouble we’re in.
Continue reading “Gross Domestic Product and U.S. Inequality”
By Karen Shaw Petrou and Basil N. Petrou
Can a change in financial policy that speeds cures for blindness also cure the way disability now exacerbates U.S. economic inequality? Legislation introduced just yesterday shows how.
Like most severe disabilities, blindness and significant vision impairment are major causes of un- and under-employment. 72 percent of blind Americans are not employed on a full-time basis, which by definition almost always makes them among the most economically unequal of all Americans regardless of race, age, or region. To be sure, some blind people are gainfully employed – determination over the years and, now, technology and guide dogs drop the barriers to full achievement in almost every line of work and profession. But far too often, the problems in education that disadvantage all too many Americans are still worse for the disabled, as are perceptions about incapacity and even downright discrimination. Continue reading “Seeing One Way Out”
By Karen Shaw Petrou
When I spoke at the Federal Reserve Bank of New York on March 1, I pressed hard for less reliance on data that washes away growing U.S. economic-inequality gaps. Happily, many at the talk readily concurred. For those who disagree, take note: an amendment added on March 6 to a House Financial Services Committee budget statement for the first time demands that the Fed do better when it makes judgments about U.S. prosperity. Continue reading “One Small Step for Better Monetary-Policy Models”
By Karen Shaw Petrou
Does economic inequality lead to political polarization that then creates gridlock that increases economic inequality and turns negative feedback into M.C. Escher’s tessellated stairway to a political doom loop?
After the first full year of Donald Trump and a GOP-controlled Congress, it’s easy to conclude that we’re in the part of the cycle where inequality leads to polarization and then to gridlock broken only by anti-distributive policies and more acute polarization before gridlock sets in again. Getting a really bad feeling, I turned to a review of academic literature on economic inequality and political polarization. It generally confuses causality and correlation, but nonetheless shows that conventional wisdom is right: all of these forces make this a particularly parlous political session with potentially dangerous consequences for long-term comity and even stability. Put another way, 2018 will be way ugly. Continue reading “The Mother of All Negative Feedback Loops: Economic Inequality, Political Polarization, and the 2018 Congress”