In 1992, James Carville famously coined the phrase, “It’s the economy, stupid!” More than 20 years later, inequality has worsened to an unprecedented degree, but progressives fighting to end inequality have forgotten Carville’s lesson and, in the process, the most potent argument of all.
Many individuals helped construct neoclassical economics, often with financial support from the robber barons and their successors. I will focus on two: in the United States, John Bates Clark (1847-1938), and in Europe, Vilfredo Pareto (1848 to 1923).
In Thomas Piketty’s doomsday model, slowing of growth in the twenty-first century will cause an inexorable increase in inequality. Piketty is not the first to propose a grand model of inequality and growth. To get some perspective on his model, let’s see what the “classical” economists had to say (Part I), and how the “neoclassical” economists responded (Part II).
If you give a dollar to a middle class family, that family will spend that dollar in the local economy and spur growth.
This year’s fast GDP growth underlines one of the great myths of economic statistics: the myth that growth benefits everyone, or at least most people.
Detroit’s property tax base, diminished and badly-assessed, could still fund a renewal if Michigan would only read its history and find the political will.
The inequality and growth debate is a red herring. It just doesn’t matter. The problem is inequality, and its solution is simple.
Following on the heels of the 2008 global financial crisis and the associated spike in government borrowing in Europe and the United States, the Reinhart-Rogoff paper quickly became a touchstone for the small-government crowd. Austerity is the order of the day. Reinhart and Rogoff are its prophets.
How can things be so much worse now when the economy is essentially in the same place it was five or six years ago? The answer in two words is: Rising inequality.
A new report from a UN group details how low inequality promotes economic growth — and blasts away at a status quo where the most profitable firms end up to be those that most ruthlessly drive down wages. The only winners in this status quo: the owners of the most miserly firms.
Mainstream economists all around the world used to assume that equality acted as a drag on economic growth and development. Not anymore, as new International Monetary Fund analyses make quite clear. When will U.S. politicos catch up to the new global consensus?