February 11, 2015

IF THEIR LACK OF WEALTH IS A PROBLEM...:

Republicans are finally talking about income inequality. But they're getting it all wrong. (James Pethokoukis, 2/11/15, The Week)

[I]f you do think growth is the answer, then the Fed has been a friend, not a foe. The central bank's quantitative easing plan, according to Republican economist Martin Feldstein, was a "success" that stimulated growth and job creation. Or as JPMorgan economist Michael Feroli notes, "To the extent Fed policy has been stimulating economic activity...it is serving to narrow wage disparities -- or at least offset other longer-run forces that have been contributing to growing wage inequality."

You know what's bad for the middle class? A never-ending recession like the one in Europe, thanks in large part to a do-nothing central bank.

So how should Republicans think and talk about inequality? The big problem with high-end inequality is not that it necessarily reduces GDP growth. Instead, it increases the impact of barriers to income mobility such as poor schools, pricey colleges, weak public transit, and onerous occupational licensing schemes. If you can't climb the ladder, then a top rung that's ever further away becomes a bigger problem. While conservatives should applaud when an entrepreneur strikes it rich thanks to an innovative new idea, product, or service, they should freely criticize crony capitalist policies that benefit the powerful and politically connected, such as special tax breaks, strong intellectual property laws, or the safety net for Wall Street banks that are "too big to fail." 


...then building their wealth is the solution.

Posted by at February 11, 2015 1:25 PM
  

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