Inequality graphics

‘Economist’ has a nice interactive graph on US wage inequality. Worth bookmarking it. Then, I came across this blog post from Atif Mian + Amir Sufi’s blog (discontinued since) on wealth inequality. Their post is simple and presents their data and programme as well. Financialisation, focus on asset price-led growth (top-down), loose monetary policy aided in large measure by hedonic pricing adjustments that conceal inflation and ‘winner take all’ attitude have all contributed to it.

If I have to fix inequality, I will start with restoring monetary policy to being truthful to its stated goals, using correct data. But, if inflation were to be revealed by the data in all its ugly glory (or gory), then social security payments and commitments will rise in the US (and, perhaps, in other countries too). Governments have little room to raise revenues and that too amidst declining growth potential contributed not in the least by aging population.

Therefore, true inflation data or not, monetary policy has played not only a very big role in fomenting bubbles (and, hence, in the ensuing busts) but also in the global inequality phenomenon. So, that is the place to start.


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