US inequality near highest levels in 100 years: Fed chief
Washington (AFP) - Federal Reserve chief Janet Yellen warned Friday that the gap between the rich and poor in the United States is widening and is near the highest levels seen in 100 years.
"But widening inequality resumed in the recovery, as the stock market rebounded," Yellen said, noting that "wage growth and the healing of the labor market have been slow, and the increase in home prices has not fully restored the housing wealth lost by the large majority of households for which it is their primary asset."
Yellen said "some degree of inequality" is natural and indeed "arguably contributes to economic growth, because it creates incentives to work hard, get an education, save, invest, and undertake risk."
However, that same inequality can limit access to economic resources for those lower on the ladder, "thereby perpetuating a trend of increasing inequality."
Globally, the gap between the haves and have-nots has reached levels not seen since the 1820s, the OECD said earlier this month, in a report that looked at trends in health, education, inequality, the environment and personal security.
Yellen said that the trend in recent years in the United States has seen "stagnant or falling living standards for many families."
My problem with this article and Yellen's response is that the FED doesn't know what to do to help the less fortunate, except pump QE and low interests to support banks and markets. What a load.
>" Washington (AFP) - Federal Reserve chief Janet Yellen warned Friday that the gap between the rich and poor in the United States is widening and is near the highest levels seen in 100 years."<
Income inequality has been rising for 35 years. Only someone not influenced by facts would even suggest that this had anything to do with Obama.Lol !
The FEDs pumping is one of the primary reasons there's so much " inequality " as of late.
That and Obama's economic incompetence.
What can the Federal Banking system do to help "the less fortunate"? Cutting rates and pumping reserves is about it on the monetary side. The other half is to increases fiscal stimulus....but that is the job of Congress....and you ought to know that story.My problem with this article and Yellen's response is that the FED doesn't know what to do to help the less fortunate, except pump QE and low interests to support banks and markets. What a load.
Income inequality has been rising for 35 years. Only someone not influenced by facts would even suggest that this had anything to do with Obama.
The reality is, the period of time when income inequality was at the lowest was the period when there were strong unions, a high minimum wage and high taxes on wealth.
income inequality has been rising as taxes on wealth have been reduced, minimum wages haven't kept up with inflation and unions have weakened. Of course, faced with that fact, your ideology must deflect from the real problem.
It have been very good years for the poor of the world there are far fewer relatively and even in absolut term . Almost 2 billions have ascended to the middle class from starving destitution. So why the excitement.?
What can the Federal Banking system do to help "the less fortunate"? Cutting rates and pumping reserves is about it on the monetary side. The other half is to increases fiscal stimulus....but that is the job of Congress....and you ought to know that story.
Seriously....you are going to claim that the interest rate to savers is more important than getting a lot of that money into real investments to stimulate job growth....that interest rates are more important to "the less fortunate" than jobs are?At the cost of the working class, not the wealthy. They used to pay enough interest on savings, so those who had a little left at retirement could augment their social security without dipping too far into their principle. Now because the debt is so high they don't dare raise interest rates. Lower wages, less hours and benefits, less jobs so they have no choice but to increase social programs. It's all screwed up.
Seriously....you are going to claim that the interest rate to savers is more important than getting a lot of that money into real investments to stimulate job growth....that interest rates are more important to "the less fortunate" than jobs are?
Sorry, that is screwed up thinking.
What moronic nonsense, the GOP policies and ideas have been front and center in the destruction of the middle class, as MT points out, since 1980. Your argument know no bounds when it comes to its own ignorance of GOP actions to hollow out the middle class....even to the present.Lol !
Sure. Obama and the Progressives only give a rats ass about " income inequality " when its election time.
But vote for them and things will get worse for Middle Income America and the poorest Americans who are malleable enough to believe their platitudes and bumper sticker slogans.
At the cost of the working class, not the wealthy. They used to pay enough interest on savings, so those who had a little left at retirement could augment their social security without dipping too far into their principle. Now because the debt is so high they don't dare raise interest rates. Lower wages, less hours and benefits, less jobs so they have no choice but to increase social programs. It's all screwed up.
What part of the "less fortunate" have enough savings to realize significant extra spending from savings dividends?You get more money into the hands of savers and they'll stimulate growth thru more retail purchases, instead of cutting back to barebones.
There is your admission that this is not about the "less fortunate" with savings accounts.....and guess what, trickle down... never did.It's the stalled growth from feeding the top, which doesn't trickle it back down anymore that's killing the economy.
Actually, the average interest rate throughout history seems to have been about 2 percent. And there are more jobs around. They are just not in the US. In the United States you cannot produce a lot of the junk American consumers buy at the prices that they are willing to pay. And increasing social programs will just make it worse and increase the speed of the cycle downwards.
What part of the "less fortunate" have enough savings to realize significant extra spending from savings dividends?
Good grief.
There is your admission that this is not about the "less fortunate" with savings accounts.....and guess what, trickle down... never did.
Do you seriously need me to post wage gains per quintile since 1980....again?
Historically interest rates have dropped.
And I agree, we have a messed up business model that favors capitalistic reward to corporations that do business abroad too much. We should've been a little more nationalistic, like China.
Wage gains in comparison to costs are not comparable percentage wise.
Average Wage in 1980 around $19800.
Average monthly rent: $300
Average cost of new home: $68700
Gas: $1.19
Car: $7900
Loaf of bread: 50cents
Pound of ground beef: $1
Wages 2009: $40523
Average Monthly rent $800
Cost of a home: $238880
Car: $28400
Gas: $251
Loaf of bread: $2.79
Pound of ground beef: $3.99
So, while the average wage has basically doubled in 30ish years.
The cost of rent has gone up about 2.6 X
Buying a house cost you 3.5 X more
Gas isn't that bad, though it dropped after 1980.
Loaf of bread is up about 5.5 X
Ground beef up about 4 X
And thus we have the increasing division of the haves and the have nots.
You're argument is all wind and no substance.
Sure. I know all that and have done work on it. The period you are looking at is dominated by the inflation rate. Therefore the high interest rates, which periodically occur. when inflation is allowed to climb. When I said historical, however, I meant rather longer time series.
I wasn't comparing "wages to costs"...and you decide to regardless....whereas previously your argument was that "trickle down used to work, and if we gave savers better interest rates, it would work again...I tell yah!"Wage gains in comparison to costs are not comparable percentage wise.
I wasn't comparing "wages to costs"...and you decide to regardless....whereas previously your argument was that "trickle down used to work, and if we gave savers better interest rates, it would work again...I tell yah!"
So...I'll post this again for you to see and...ignore:
Convincing...would be supporting your claim trickle down worked...and that savings interest rates are the answer.So what, we can both show charts. And mine are more convincing.
Convincing...would be supporting your claim trickle down worked...and that savings interest rates are the answer.
What is "going down"?it's going down
Or, it's a natural consequence of a capitalist system, which is fine most of the time as long as it's within reasonable bounds.Income inequality is nothing but a socialist/progressive/commie/pinko talking point.
Actually, it's a result of the problems facing the poor, as well as the advantages of the wealthy.It has nothing to do with the poor being worse off and everything to do with the fact that those who are the movers and shakers can move and shake faster and more profitably than ever before thanks to ever-improving technological advances, greater global wealth, easier international trade, better automation and constantly improving business practices among other things.
No one is suggesting that a typical employee should be paid millions. But thanks for the straw man argument....There are great opportunities today than ever but low education and low skill and low risk jobs aren't going to pay much different than they ever did and people who go after that kind of work can't expect that the increases in their pay are going to run parallel to the pay of entertainers, sports stars, business tycoons, CEO's, etc.
Income inequality has been rising for 35 years. Only someone not influenced by facts would even suggest that this had anything to do with Obama.
The reality is, the period of time when income inequality was at the lowest was the period when there were strong unions, a high minimum wage and high taxes on wealth.
income inequality has been rising as taxes on wealth have been reduced, minimum wages haven't kept up with inflation and unions have weakened. Of course, faced with that fact, your ideology must deflect from the real problem.
What is "going down"?
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