Wealth inequality is a serious problem our future leaders will need to tackle.
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I’m writing to you through the cloudy mists of time, days before the Nov. 6 election, when America decides who will take the reins of this economy and guide it forward, backward, or over the fiscal cliff.
Chances are, when you read this, the issue will have been resolved. Barring a flurry of hanging chads or a Supreme Court appeal from Mitt Romney on the grounds that he is at least 19 different people at any given moment with dozens of distinct political philosophies – and that by statistical probability, at least one of those people must have beaten Barack Obama (an argument I have no doubt Antonin Scalia would support) – we have a president-elect.
I just don’t know who he is yet.
Deadlines being deadlines and production schedules being production schedules, my furiously typing fingers are stuck in an uncomfortable nexus of uncertainty – like a Cretaceous spider tramped in amber, unable to discern the magnificent future that lies ahead.
If Mitt Romney lost, I have made my last-ever dead non-Mormon baptism joke. If he won, I will carry the dead non-Mormon baptism torch until I die – at which point, I fully expect to be summarily baptized into the Mormon faith by Mitt Romney. (Hey, in heaven there is no beer, so why not?)
I’d like to step back a moment, then, and touch on an issue that demands a serious hearing regardless of who our president-elect is: Income inequality.
Yeah, I know, I know. But before the chorus of snores reaches a crescendo, I’d like to point to a study that could shed some light on the last four-plus years – the period spanning the Great Recession and the tepid, job-light recovery.
The study, published in September 2011 by the International Monetary Fund, found that among a range of factors affecting the length of a country’s growth periods, income distribution (namely, greater income equality) was the most important. According to study authors Andrew Berg and Jonathan Ostry, “a 10 percentile decrease in inequality … increases the expected length of a growth spell by 50%.”
The authors go on to say:
“[T]aking a historical perspective, the increase in U.S. income inequality in recent decades is strikingly similar to the increase that occurred in the 1920s. In both cases, there was a boom in the financial sector, poor people borrowed a lot, and a huge financial crisis ensued ....
“The recent global economic crisis, with its roots in U.S. financial markets, may have resulted, in part at least, from the increase in inequality.”