Tag: 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” →

Economic Inequality, Financial Crises, and 2019

~ economicequality ~ 4 Comments

By Karen Petrou

As 2018 drew to a close, the Federal Reserve Board and the Financial Stability Oversight Council each pronounced financial-stability risk to be comfortingly “moderate,” much as Ben Bernanke and Hank Paulson did in August of 2008.  It remains to be seen if market turmoil just days after is more than a bad blip, but there’s a still more worrisome financial-crisis risk lurking beneath volatile financial markets:  U.S. economic inequality.  Here, we show how current, acute inequality makes 2019 particularly perilous even if markets stabilize, President Trump eschews Twitter, the federal government begins anew, and all seems somehow otherwise right with the world. Continue reading “Economic Inequality, Financial Crises, and 2019” →

Can We Create Equality Insurance?

~ Karen Petrou ~ 1 Comment

By Karen Petrou

Much of the work posted so far on this blog centers on the traditional pillars of financial policy:  monetary policy and the sweeping post-crisis framework of bank regulation.  But, awesome though the Fed’s reach may be and as critical as banking is to income and wealth equality, these financial-policy channels are not the only ones that determine economic equality.  In this blog post, we assess another policy channel:  health, property-and-casualty, and life insurance.  With almost no research in this sector, we pose questions based on what we’ve read and what we think we know based on all our other works.  At the least, insurance requires equality evaluation and, quite likely, significant changes so it makes low-and-moderate income and wealth families healthier, readier to retire, better positioned to bequeath wealth to their children, and all around more equal. Continue reading “Can We Create Equality Insurance?” →

How the Other Half Goes Broke

~ Karen Petrou ~ 4 Comments

By Karen Shaw Petrou and Matthew Shaw

In our last blog post, we laid out the most telling inequality-data points from an important new study from the Federal Reserve Bank of Minneapolis which for the first time runs from 1949 to 2016 and adds many critical equality measures.  These data show more decisively than ever not only that wealth inequality in 2016 is the worst since at least the Second World War, but also that this is due to who holds the assets that have gained the most.  Since which assets return how much is due now in large part to post-crisis monetary and regulatory policy rather than to market forces and broader macroeconomic trends, it’s post-crisis policy – not forces from beyond – that increasingly dictates U.S. economic equality. Continue reading “How the Other Half Goes Broke” →

It’s Worse Than You Thought

~ Karen Petrou ~ 40 Comments

By Karen Shaw Petrou and Matthew Shaw

Janet Yellen, Ben Bernanke, and Jerome Powell have each bemoaned U.S. economic inequality and then asserted that it’s everyone else’s fault.  On the blog and in our speeches, we counter that post-crisis monetary and regulatory policy had an unintended but nonetheless dramatic and destructive impact on the income and wealth divides.  In doing so, we often point to just how much worse and how much faster inequality became as post-crisis policy took hold.  Demographics, technology, and trade policy didn’t change anywhere near that much that fast.  Now, a new study from the Federal Reserve Bank of Minneapolis takes the story forward with a trove of data evaluating U.S. economic inequality from 1949 through 2016.  For all the recovery and employment the Fed cites in its equality defense, these data tell a far different tale.   Continue reading “It’s Worse Than You Thought” →