http://www.nytimes.com/2014/10/18/upshot/what-janet-yellen-said-and-didnt-say-about-inequality.html?ref=economy&abt=0002&abg=0
This article is a critique of Janet Yellen's speech on Growing Inequality in the United States.
In her speech, Yellen questions whether the trend of growing inequality is in conflict with the core American value of equal opportunity. Unfortunately, Yellen does not delve into any of the Fed's policies although she does mention areas which need to be re-looked at.
Income inequality can create a positive incentive for people to work harder, but recently inequality has reached its highest levels yet, with the wealthiest 5% of people owning 63% of the total wealth. Many of the policies from the Fed have benefited the upper class while having a less direct effect on the poorest people. It is likely we will see some drastic changes in the future to deal with these issues as the inequality becomes more severe.
It's interesting, and I've always wondered if equal opportunity was just a construct of the founders of our country who were undoubtedly well endowed. Financial policy almost always tends to favor the rich, as politicians are almost exclusively products of rich families, and its clear that not every american is given an "equal" opportunity to succeed.
ReplyDeleteI agree with Gunnar, having the capacity to spend more money than someone can always increase your chances of accessing better opportunities in the work place. This type of problem is really hard to address as one group will always feel alienated as a result of the policy to deal with this gap.
ReplyDeleteI agree with Gunnar, having the capacity to spend more money than someone can always increase your chances of accessing better opportunities in the work place. This type of problem is really hard to address as one group will always feel alienated as a result of the policy to deal with this gap.
ReplyDeleteI agree that there comes a point when the income inequality is so extreme that it actually hinders the less financially stable citizens in their everyday life, but is America really at this point? Having more than someone else isn't inherently unequal unless it effects other aspects of life except the market place. I would be interested to see the specific effects of the inequality in the US instead of just a statistic.
ReplyDeleteIt's interesting that Yellen is even commenting on such a matter. There's no secret that there's inequality in America. And while I do agree that inequality can push some poor people to work harder for a better life, I don't believe that's the main reason for the large gap between the rich in the poor. I believe the main reason for this gap is the very few "Elites" in our society are the people who policies are benefitting. The rich continue to gets richer while the poor remains the same. I agree with Yellen. This inequality or gap goes against what we stand for as a nation. However, I honestly don't see it changing much because the people who are usually in charge of changing it won't benefit much from the change.
ReplyDeleteIf we could maybe see a follow up article showing advancements related to the information stated such as areas to re-look then I believe we can make a valid opinion of what to make of this situation. It's obvious wealthy citizens have more opportunities for themselves through their higher income than the poor. I understand this factor of inequality can motivate the poorer citizens to work harder and strive for an increased income yet the policies presented are rarely in their favor. This diminishes their motivation to work harder because the poor will see themselves working against the Fed's outlook which is disheartening.
ReplyDeleteIncome inequality is always an interesting issue. On one hand you have wealthy people who have better education and have worked to make their vast wealth. Then you have lower people that didn't have as much opportunity as the rich. But the rich do help lower income people because a larger amount of their income is taken out from taxes. Which then can be used to help giver lower income people more opportunities. I believe if income inequality is to be fixed it has to start from the top down because if you start from the bottom up, the rich will move their money elsewhere before it could be used to help lower income people. This issue will take time but I have faith in the long run income inequality will not be as big as it is now.
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