Where We Live: Income Inequality and Economic Growth

The elections are shaping up to be largely about the issue of income inequality

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Where We Live: Income Inequality and Economic Growth
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Where We Live: Income Inequality and Economic Growth

The November elections are shaping up to be largely about the issue of income inequality.

That’s especially if multi-millionaire investor Mitt Romney gets the Republican nomination - which seems increasingly likely.  News of Romney’s tax rate - around 14% - coupled with outspoken statements from other uber-wealthy investors like Warren Buffett - who think they really should be paying more in taxes than those who work for them - have set up this battle.

Some call it class warfare - but authors of an IMF report say it might just be a fight over America’s economic future. They show that inequality hinders long-term economic growth.

Then, there’s the question of Washington’s role in the growing inequality. When the typical member of congress is worth 9 times more than the typical voter, it can be asked - “are they really in tune with the problem?”

Join the conversation with Yale political scientist Jacob Hacker.


  

Comments

Listener Email from Bill

I never hear a complete analysis of the reason why inequality increased so rapidly in the US. We had trade liberalization combined with strong dollar policy in the 90s. Trade liberalization opened up China and a strong dollar policy made it cheaper to build factories in China and at the same time made it cheaper to import goods from China. Much of that capital flowed back into the US which pushed down interest rates and created a greater pool to borrow from. This pushed up housing and allowed Americans to mask wage stagnation with increased borrowing. Wall St and Walmart made out the best.

Listener Email from Mary

It would be good if in another show you could more closely at what is happening in Ct (hedge fund harbor) and the very willing "entitlement: that enables stunning disparity between the city of Hartford, which is politically occupied by the wealthy corporations. Speaking generally about the United States, is thoughtful, yet Connecticut ought to focus on changing the wealth disparity within the state. Hartford is only 17 square miles.

In terms of poverty, income, employment, and education, Hartford maintains the greatest disparity with its suburban neighbors of any U.S. city. It has lost a third of its manufacturing jobs in the last 30 years, and more than 14% of its residents are currently unemployed

Listener Email from Adam

It seems that the one of the greatest challenges with respect to growing inequality in our country is the acceptance of this new, polarized inequality as a inevitable, intractable problem. Given the parallel in income inequality and as Jacob Hacker refers to as a subsequent decline in equality in the democratic process, how do we reverse this dramatic course to greater inequality and get back to a more equitable prosperity built by a strong middle class? How do we overcome the semantics around inequality where any course correction is quickly labeled in a pejorative sense as 'European', 'socialist' or 'anti free-market'?