Tag: Growth

“People’s QE” and Noblesse Oblige

~ Karen Petrou ~ 1 Comment

By Karen Petrou

As the chimera of the post-crisis recovery fades and central bankers find themselves powerless to reverse recession, “people’s quantitative easing” is gaining attention as a tool a growing number of central bankers fancy gives them a new way to wreak their beneficent will.  People’s QE – also known more colorfully as “helicopter money” – means that, despairing of fiscal-policy remedies, central banks print money and then either just give it to the people or invest it in assets they or their bosses think best for equalizing, trade-deficit dropping, climate-restoring, or other all-to-the-good economic growth.  However, it’s not just central bankers casting longing eyes at the ability of central banks to print money – officials ranging from those in the Trump Administration to the Democratic Socialist candidate for President see it as a new way to do what they think are the voter’s bidding without raising the deficit.  This is really, really central banking, but for all its power, it’s very problematic.  QE so far has done little to spur sustained recovery and much to make the U.S. even more unequal.  There’s no reason to believe a people’s QE will be any better. Continue reading ““People’s QE” and Noblesse Oblige” →

2020’s Equality Policies 101

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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” →

The Missing Middle Class

~ Karen Petrou ~ 1 Comment

By Karen Petrou

When we started this blog in 2017, we began with a plea for the Federal Reserve to factor inequality into its monetary and regulatory policy equation.  We showed at the start, here, here and here, that the Fed’s focus only on averages and aggregates obscures sharp polarization at each end of the U.S. income and wealth distribution.  It is these polarizations, as we’ve repeatedly seen in blog posts that undermine the Fed’s ability to set the U.S. economy on a forward trajectory of shared prosperity and stable growth – i.e., to meet its dual mandate as Congress expressly defined it in the Humphrey-Hawkins Act of 1978.  The Fed is still resolutely crafting monetary policy with its eyes firmly averted from increasing inequality.  Continue reading “The Missing Middle Class” →

A Paradox: U.S. Growth and Who Got Left Behind

~ Matthew Shaw ~ 8 Comments

By Matthew Shaw

Absent geopolitical or market surprises, the current U.S. expansion will by summer be the longest consecutive period of economic growth on record.  That’s the good news.  The toxic side-effect of all this prosperity:  how little of it is equitably shared and how angry that makes the majority of Americans ahead of the next election.  If income and wealth growth over the 2016-2019 period tracks 2010 to 2016, then the middle class will be no better off in 2019 than 2001 even with almost a decade of aggregate growth. Continue reading “A Paradox: U.S. Growth and Who Got Left Behind” →

Gross Domestic Product and U.S. Inequality

~ Karen Petrou ~ 3 Comments

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” →