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Fri May 10, 2019, 08:33 AM

Fed's Brainard says income inequality may be hampering U.S. economy

Source: Marketwatch

Rising inequality could be a factor behind sluggish growth in the U.S. economy in the wake of the financial crisis, said Federal Reserve Governor Lael Brainard on Friday.

Consumer spending remains the main engine of growth in the U.S. and data show that the recovery in consumer spending after the crisis has been slower than would have been expected given the recovery in aggregate household income and net worth, Brainard said, in a speech at a Fed conference on community development.

“Rising inequality is one plausible explanation” for this trend, she said.

Research shows households with lower levels of wealth spend a larger fraction of any income gains than households with higher levels of wealth, Brainard said.

“Consequently, an economy that delivers and increasing share of income gains to high-wealth households could result in less growth in consumer demand than one in which the gains are distributed more equally,” Brainard said.


Read more: https://www.marketwatch.com/story/feds-brainard-says-income-inequality-may-be-hampering-us-economy-2019-05-10?mod=mw_latestnews



Interesting that someone finally has said we have a sluggish economy

41 replies, 2129 views

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Reply Fed's Brainard says income inequality may be hampering U.S. economy (Original post)
UpInArms May 10 OP
BootinUp May 10 #1
Bernardo de La Paz May 10 #4
DemocracyMouse May 10 #15
PETRUS May 10 #19
Bernardo de La Paz May 10 #22
DemocracyMouse May 10 #36
PETRUS May 11 #40
brewens May 10 #2
Bernardo de La Paz May 10 #7
Yavin4 May 10 #18
Bernardo de La Paz May 10 #23
cstanleytech May 10 #3
hatrack May 10 #5
maddogesq May 10 #6
not fooled May 10 #8
ProfessorPlum May 10 #9
William Seger May 10 #10
Blue_playwright May 10 #14
yaesu May 10 #11
Wounded Bear May 10 #12
BeyondGeography May 10 #13
SWBTATTReg May 10 #16
Yavin4 May 10 #17
Marthe48 May 10 #20
CrispyQ May 10 #21
House of Roberts May 10 #24
Skittles May 10 #26
at140 May 10 #28
Skittles May 10 #29
at140 May 10 #30
at140 May 10 #32
Skittles May 10 #33
at140 May 10 #35
Skittles May 11 #38
yonder May 10 #34
CrispyQ May 11 #39
CrispyQ May 10 #37
Skittles May 10 #25
democratisphere May 10 #27
shanny May 10 #31
MurrayDelph May 12 #41

Response to UpInArms (Original post)

Fri May 10, 2019, 08:43 AM

1. I've been saying this for 10 years. Nt

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Response to BootinUp (Reply #1)

Fri May 10, 2019, 09:12 AM

4. Me too, almost as long. Rich park money. Working class spend money. Money in motion fuels economy.nt

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Response to Bernardo de La Paz (Reply #4)

Fri May 10, 2019, 11:41 AM

15. Money is like blood. If it moves, the body is oxygenated and energized...

And if it stops moving, it clots and kills the organism.

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Response to DemocracyMouse (Reply #15)

Fri May 10, 2019, 12:52 PM

19. I would be profoundly disappointed...

...if inequality was only addressed as part of an effort to boost economic growth. Inequality is a problem, full stop (i.e., whether or not it has an impact on growth), and we need to deal with it. But growth is also a problem, and we need to deal with that as well.

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Response to PETRUS (Reply #19)

Fri May 10, 2019, 01:48 PM

22. Absolutely. These levels of inequality unsustainable. End peacefully (US 19th c) or 1789/1917. . .nt

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Response to PETRUS (Reply #19)

Fri May 10, 2019, 09:16 PM

36. That's why I suggested a biological metaphor for the circulation of money in the system.

Our goal should NOT be growth, which is killing the planet like a cancer. It should be global health and well-being. Thus, spend less on the unnecessary and wasteful (5 second homes for the rich), and more on the mninimum necessary for well-being (a middle class-for-all paradigm. Some competition is good, and a spread of means is inevitable, but EXTREME wealth disparities is killing us.

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Response to DemocracyMouse (Reply #36)

Sat May 11, 2019, 05:54 PM

40. Yes. I thought we might be on the same page.

Frankly, we've already consumed enough resources and generated enough waste that a contraction is inevitable. Continuing to pursue economic expansion isn't going to change that, it will only make it worse. We could choose de-growth deliberately and lessen the impact at least somewhat, but I don't see that happening. Capitalism requires growth. Taking on inequality is a steep enough uphill struggle against powerful opposition, let alone taking on capitalism itself.

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Response to UpInArms (Original post)

Fri May 10, 2019, 08:51 AM

2. Ya think? Notice they never try a working class only tax cut. Trickle up economics works and

everyone knows it. But it narrows the income gap and that is unacceptable to those at the top.

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Response to brewens (Reply #2)

Fri May 10, 2019, 09:38 AM

7. Trickle up? It's more like a geyser up! It's money really in motion. . . . nt

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Response to brewens (Reply #2)

Fri May 10, 2019, 12:34 PM

18. How about raise the minimum wage on a the federal level?

Pay Americans more money so that they can buy more things and not live paycheck to paycheck.

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Response to Yavin4 (Reply #18)

Fri May 10, 2019, 01:49 PM

23. As Republicons love to say "A rising tide lifts all boats" even though it was JFK who said it. . .nt

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Response to UpInArms (Original post)

Fri May 10, 2019, 09:11 AM

3. Well no shit!!!

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Response to UpInArms (Original post)

Fri May 10, 2019, 09:16 AM

5. NO!!!

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Response to UpInArms (Original post)

Fri May 10, 2019, 09:34 AM

6. 1...2...3...well duhhh.

We’ve known about this problem for years now. As said above, I am glad someone in the money world has the guts to say it.

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Response to UpInArms (Original post)

Fri May 10, 2019, 10:22 AM

8. They know this

their problem is trying to jerry-rig the economy to produce growth without putting money in the hands of anyone except the wealthy.

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Response to UpInArms (Original post)

Fri May 10, 2019, 10:42 AM

9. gee, there's a lightning bolt

Give the people who will spend it the money instead of the people who hoard it. Money flows, economy picks up. Simple Keynesian economics.

this is so obvious that the alternate method (give $ only to people who won't spend it) was appropriately dubbed "voodoo economics" by G. H. W. Bush those many years ago.

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Response to UpInArms (Original post)

Fri May 10, 2019, 10:45 AM

10. "We all do better when we all do better" - Paul Wellstone

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Response to William Seger (Reply #10)

Fri May 10, 2019, 11:26 AM

14. Aw. Wish he were still here.

Nt

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Response to UpInArms (Original post)

Fri May 10, 2019, 10:47 AM

11. it will destroy the economy & the country. nt

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Response to UpInArms (Original post)

Fri May 10, 2019, 11:17 AM

12. They love to publish how many millionaires are created...

they tend to ignore how many people drop out of the bottom of the middle class into poverty.

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Response to UpInArms (Original post)

Fri May 10, 2019, 11:23 AM

13. Ya think?

Next thing you know, they’ll be talking about runaway housing, health care and education costs.

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Response to UpInArms (Original post)

Fri May 10, 2019, 12:26 PM

16. Thus based upon this finding, an easy way to pump the economy is to give everyone ...

(99% of us) a chunk of money and increase taxes on the top 1% to pay for it...make ALL of us pay for it, including those companies that somehow get away without paying a dime in taxes (Amazon, etc.).

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Response to UpInArms (Original post)

Fri May 10, 2019, 12:33 PM

17. This is the kind of genius that lands you those big positions at the Fed.

Gee, people don't have enough money to spend. Maybe that's why the economy is so sluggish. Brilliant!!!

Give that man the Noble prize!!!

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Response to UpInArms (Original post)

Fri May 10, 2019, 12:52 PM

20. I don't know how most families are making it

Everything costs so much. When you have housing costs, a car payment, insurance, taxes at all levels, plus school tuition if you opt for a non-public school, groceries and medicine, how is there anything left? People are passing things along, sharing, buying used, just to save a few cents.

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Response to Marthe48 (Reply #20)

Fri May 10, 2019, 01:19 PM

21. Rent is $1000 a bedroom in my area. Starter homes are over $300K.

I don't know how young people are doing it.

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Response to CrispyQ (Reply #21)

Fri May 10, 2019, 06:29 PM

24. To start, they likely don't live in your area.

Most of them rent, and share expenses with roommates.

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Response to CrispyQ (Reply #21)

Fri May 10, 2019, 07:09 PM

26. young folk have it SOOOOO much harder than when I was young

I remember working a minimum wage job, living in a cheap apartment, buying a used car and taking college classes, all without going into big debt......no WAY could a young person do that now

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Response to Skittles (Reply #26)

Fri May 10, 2019, 07:17 PM

28. It is called inflation

Caused by excess money supply. Inflation helps large stock holders and the top 2% make bigger profits but kills the middle class ordinary working folks. Those $Trillion+ yearly deficits are accelerating wealth transfer from middle class to the Uber rich.

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Response to at140 (Reply #28)

Fri May 10, 2019, 07:22 PM

29. it is WAY more than inflation

the way they are saddling people trying to get an education with HUGE debt, the way paychecks have NOT kept up, the gig economy very often with inadequate pay and no benefits, the expectation that they need to fund ALL of their retirement, the extreme increase in medical and dental costs.....everything is truly screwed up now

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Response to Skittles (Reply #29)

Fri May 10, 2019, 07:34 PM

30. It is just too easy to get student loans

When my daughter was in law school, she had friends in law school using student loans to buy cars and go on vacations. Students don't need any equity to back up loans. The college's can jack up the fees knowing students can get easy loans.

The artificial low interest rates (lower than real inflation rate we live with) is the reason for bubbles in hard assets like stocks & houses.

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Response to Skittles (Reply #29)

Fri May 10, 2019, 07:42 PM

32. And don't even get me started on healthcare

Costs! At age 57 I had high blood pressure, chest pains after eating a good meal, hip joint pain, fainting spells at job, and was border line diabetic.

So I resigned from the job, simplified my life, moved to a cheaper cost of living area and began exercise routine. Now at age 79, no more high blood pressure, no more hip joint pain, no longer border line diabetic, and off all medications! I signed up with Humana HMO Medicare advantage plan which costs nothing in premiums and actually
pays me $55/every month to stay on the plan!

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Response to at140 (Reply #32)

Fri May 10, 2019, 07:56 PM

33. I am just curious but

why did you wait until you were very ill to start exercising? I always wonder about that.

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Response to Skittles (Reply #33)

Fri May 10, 2019, 08:00 PM

35. Was working full time in a stressful

Job, needed the money to raise family. Left me little time or energy for exercise. And it is very hard to give up a well paying job. But I saw only options were drop dead or give up the money and live a bit longer.

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Response to at140 (Reply #35)

Sat May 11, 2019, 02:32 AM

38. makes sense

glad your are feeling better

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Response to Skittles (Reply #26)

Fri May 10, 2019, 08:00 PM

34. Yes, same here and it seems like there was always enough

to sock away and/or spend on non-necessities. Minimum wage in 1970 was what, like $1.45/hour maybe $1.90? I had a friend who was making $4.00/hour back then - we considered him rich.

The one site I looked at said $10.00 in 1970 was worth $66.64 in 2019 dollars. I don't think the working women and men of this country, the consumers and producers, the folks who sweat and freeze in often dangerous jobs, the very people who keep our system going, are keeping up.

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Response to yonder (Reply #34)

Sat May 11, 2019, 12:40 PM

39. "Take this Job and Ship It" by Byron Dorgan a past senator from ND, I believe.

This book is really old, 2004, I think, but the one stat I remember he mentioned is that if minimum wage had kept up with CEO pay since 1990, it would be approximately $23 an hour. That was back then. Wonder what it would be now?

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Response to Skittles (Reply #26)

Fri May 10, 2019, 09:53 PM

37. I didn't do it on a minimum wage job. I did it with a part time UNION job.

I put myself through college with a good paying part time union job. If you were born in/after 1980, all you've ever heard is that unions are bad. If you punch a time clock, or even if you don't, but your salary is the majority of your household income, then you are labor. My engineer friends don't want to be categorized with labor, but they are.

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Response to UpInArms (Original post)

Fri May 10, 2019, 07:07 PM

25. oh YA THINK???

imagine that

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Response to UpInArms (Original post)

Fri May 10, 2019, 07:15 PM

27. Economic intelligence.

Where the hell did this finally come from?

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Response to UpInArms (Original post)

Fri May 10, 2019, 07:35 PM

31. oh well THERE'S a News Flash!

"Research shows"? Eff me. Our overlords are pretty fucking stoopid, end of story.

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Response to UpInArms (Original post)

Sun May 12, 2019, 11:47 AM

41. I think the appropriate response

involves a Conan Doyle character and a declaration of constipation.

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