Baseball Cards for the Equality Game?

By Karen Shaw Petrou

Although the Federal Reserve resolutely rebuffs suggestions – mine included – that it’s exacerbated U.S. economic inequality, the Bank of England has been forced by public outcry to deal directly with its own inequality impact.  Reacting to strong public protest and withering fire from the Prime Minister, the BoE recently released not only a report denying the charges itself, but now also an exculpatory speech by Andrew Haldane, its influential chief economist.  Clearly feeling the heat, the Bank of England has even come up with a way to sell its positive message:  personalized “scorecards” proving to the skeptical citizenry that it’s better off than personal economic problems might lead it to believe.  Continue reading “Baseball Cards for the Equality Game?”

The Mother of All Negative Feedback Loops: Economic Inequality, Political Polarization, and the 2018 Congress

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”