Tag: Millennials

How Inequality, Not Polling, Predicted the 2020 Election

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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.

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Dialing for Dollars: Solving CBDC’s Equality Conundrum

~ Karen Petrou ~ 1 Comment

By Karen Petrou

  • CBDC advocates tout its inclusiveness, but the digital divide is a profoundly exclusionary impediment to CBDC access for LMI, disabled, older, and rural households. 
  • Centralized deposit-taking and payments via the Post Office and/or Fed pose challenges to personal privacy and even freedom of expression that, if not averted in initial design, could come to pose significant political and governance risk.  Lack of private competition also presents discrimination risk based on pricing or other terms not subject to outside scrutiny.
  • If CBDC succeeds as some envision it, then lending will come either from the federal government – Big Brother problems of still more concern – or capital-markets sources outside the perimeter of safety-and-soundness and often also consumer-protection regulation and enforcement.
  • A CBDC in which the Fed acts as an open-source utility corrects for many current inclusion, governance, and intermediation obstacles to payment-system speed and efficiency. 
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American Millennials: The Generation the Recovery Left Behind

~ Karen Petrou ~ 1 Comment

By Karen Petrou

In our last blog post, we chronicled the continuing demise of the American middle class.  Now, we turn to the equality disaster evident in the most recent U.S. demographics.  A new General Accountability Office (GAO) study confirms that millennials (those aged 18-37) are rapidly losing any chance of doing better than their parents and trends are extraordinarily inauspicious for NextGen followers.  Inter-generational economic mobility was once as much a hallmark of America as its robust middle class – in 1970, 92 percent of 30-year-olds made more money in inflation-adjusted terms than their parents did at similar ages even though the 1970 economy was considerably weaker than the prewar boom.  Now, millennials are far, far behind their parents.  Looking at wealth share,* baby-boomers owned 21 percent of U.S. net wealth when they turned 35 (1990 on average). Continue reading “American Millennials: The Generation the Recovery Left Behind” →