Income Inequality Means Slow Economy

From the Washington Post (10/17/2011) Wonkbook: Will Obama occupy Wall Street? http://is.gd/QjCiCB

…Equality helps economies grow, writes Nicholas Kristof: “In his important new book, ‘The Darwin Economy,’ Robert H. Frank of Cornell University cites a study showing that among 65 industrial nations, the more unequal ones experience slower growth on average. Likewise, individual countries grow more rapidly in periods when incomes are more equal, and slow down when incomes are skewed. That’s certainly true of the United States. We enjoyed considerable equality from the 1940s through the 1970s, and growth was strong. Since then inequality has surged, and growth has slowed. One reason may be that inequality is linked to financial distress and financial crises. There is mounting evidence that inequality leads to bankruptcies and to financial panics. ‘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,’ Andrew G. Berg and Jonathan D. Ostry of the International Monetary Fund wrote last month.”…

Also, here’s a chart for those who still sympathize with the top 1% income earners, and often make bogus claims that everyone has benefited from U.S. economic growth over the past 30 years.

Since I was born, all income growth has gone to the top 10% of earners, income for the bottom 90% declined. So, NO, not “everyone” has benefited from economic growth in the United States. Some things like cleaner air, individual rights, technological progress, and medical breakthroughs have improved our standard of living, but as far as wealth is concerned, just about all the gains have been concentrated at the top for over 3 decades!

This is not sustainable! This is just one reason why people are protesting in the streets!