07.23.2013 Policy Points

Moving Beyond Inequality

Jared Bernstein weighs in regarding potential solutions to the problems of inequality and diminished economic mobility.

In my writing, I’ve identified this as the uniquely American, highly toxic combination of wealth concentration interacting with money in politics to create a vicious cycle that promotes higher inequality, less mobility, and — clearly evident in the current context — dysfunctional politics that can’t begin to do anything about either the macroeconomy or the inequality problem except make them worse.

In this regard, solutions must be both political, structural (for example, campaign finance reform) and much more demand side than strictly supply side (education being the latter — and to be clear, I agree that’s a critical part of the solution).  This is where the full employment policies I’m always going on about fit in, along with greater union power, higher minimum wages, financial market regulation, progressive taxation, and taking aim at the persistent trade deficit that has been sapping demand from our manufacturers for decades.

That’s a huge, ambitious agenda, one that goes so far beyond the realm of the possible that it may seem curious to even raise it.  But the fact is that anything useful goes beyond what’s possible right now, and I just don’t see the point of bringing a squirt gun to a forest fire.  At the very least, I’d like my fellow travelers to envision the full scope of what we’re up against.

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