Inequality Rising

By Karen Petrou

As the COVID crisis continues, some have speculated that wealth inequality will drop because it did in the 1400s during the Black Death.  However, this cure is not only of course considerably worse than the disease, but it’s also no cure.  Economic inequality is a cumulative process – the worse off you are, the worse off you get unless something positive reverses this compound effect.  Conversely, the better off, the still more comfortable unless something comes along to redistribute your gains, however well or ill gotten.  Given how unequal the U.S. was before COVID, it will surely get only more so now, especially if the Fed stays the course with trillions for financial markets and pennies for everyone else. Continue reading “Inequality Rising”

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”

If You Really Want to Be Unequal, Be Disabled

By Karen Petrou and Matthew Shaw*

Like most who assess U.S. economic inequality, we’ve focused in this blog on the way income and wealth divide across Americans in general, by race, by age, by gender, by ethnicity, and even by nothing more than where one lives.  However, working on another pro bono initiative – this time to speed biomedical research – it’s dawned on us that there’s another major factor that divides the haves from the have-nots that’s even less the result of individual action than all these well-studied demographic criteria:  disability. Continue reading “If You Really Want to Be Unequal, Be Disabled”

Still Economic Waters Hide Lurking Danger

By Karen Shaw Petrou

On Tuesday, FRB Chairman Powell delivered a strongly-positive statement on the state of the U.S. economy.  Citing factors such as recent wage growth and employment, Mr. Powell is far more worried about keeping the good times going than about how inequitably the good times deliver the goodies across the gaping U.S. income and wealth divide.  This is setting monetary and regulatory policy the same way a diver looking only at a calm, blue surface jumps into a lake and breaks his neck.  Continue reading “Still Economic Waters Hide Lurking Danger”