In the first three years of the recovery, 91 percent of all gains went to the top 1 percent. So the bottom 99 percent saw nothing. Many were actually becoming worse off: Their balance sheet had been destroyed, their major asset has been their home and the value of their home had gone down anywhere from 20 to 50 percent. Then came QE, and it created a stock-market but the average American has very little in the stock market. Overall ownership of stocks, is much more concentrated than the concentration of wealth itself, so QE was basically a gift to the 1 percent.
The people at the bottom are not doing very well, and wealth inequality, in that sense, has gotten worse. There are so many of these dimensions where the statistics that the Federal Reserve and the administration don’t connect with the lives of ordinary Americans.
.. There are many people for whom they lost their job at 50 or 55 and are unlikely to ever work again. The scar is permanent.
.. They should have focused more on improving the channel of credit to make sure that money was going to small and medium-sized enterprises They should have said to the bank—like some other countries have done—if you want access to the Fed window you have to be lending to SMEs.
.. Who are the best and worst options in terms of the effect that their economic policies will have on inequality?
Stiglitz: The most problematic option is clear: Cruz. He’s an ideologue. Conservative Republicans like him because he’s true to the faith, that means getting rid of social security, making our tax system more regressive, cutting back on all the programs that lean against growing inequality. Of the major candidates remaining, he stands out as the person most likely to do the most harm.
.. I think a lot of people feel that in those first two years where there was a Democratic president and a Democratic Congress he could’ve gotten a lot more done—he was just too conservative. He was too much in the hands of the banks, too much in the hands of big business, too much in the hands campaign contributors. He’s done a lot of things by executive order in the last year, like raising the minimum wage and climate change. But a lot of people are wondering, why did he wait?
.. who is to blame for the crisis and the inequality that grew after it. One of the answers you say are economists.
.. The strange thing about the economics profession over the last 35 year is that there has been two strands: One very strongly focusing on the limitations of the market, and then another saying how wonderful markets were. Unfortunately too much attention was being paid to that second strand.
.. A very large fraction of the younger people, this is what they want to work on. It’s very hard to persuade a young person who has seen the Great Recession, who has seen all the problems with inequality, to tell them inequality is not important and that markets are always efficient. They’d think you’re crazy.
The Most Career-Minded Generation
Compared to 30 years ago, young people today are much more likely to say they’re going to college to secure a good job and steady pay.
.. According to admissions departments’ informational pamphlets, the primary reason for attending college is rather noble: Campus is a place to discover one’s interests and strengths, a place for both personal and intellectual development. But in recent years, another narrative has taken hold—that what matters is return on investment. In other words: What kind of job-market value does a graduate get from a college degree?
.. Twenge said that she and Donnelly sorted the reasons provided for going to college as being either extrinsic or intrinsic.
.. The researchers do note, however, that the reasons to go to college became more extrinsic at the same time and at the same pace as income inequality increased. It’s not conclusive, but, they write, “Millennial students’ focus on making more money may be a practical consideration.”
.. “Education is the only product that the ‘consumer’ seems to want less of (many students would be happy to get A’s for no work). And if the student sees college as transactional—‘I pay my money; you give me my degree’—they are actually getting less of the product they are paying for (an education).
Money, Race and Success: How Your School District Compares
Children in the school districts with the highest concentrations of poverty score an average of more than four grade levels below children in the richest districts.
.. What emerges clearly in the data is the extent to which race and class are inextricably linked, and how that connection is exacerbated in school settings... Mr. Reardon said that educators in these schools may subliminally – or consciously in some cases – track white students into gifted courses while assigning black and Hispanic students to less rigorous courses.
How the Other Fifth Lives
Segregation of affluence not only concentrates income and wealth in a small number of communities, but also concentrates social capital and political power. As a result, any self-interested investment the rich make in their own communities has little chance of “spilling over” to benefit middle‐ and low-income families. In addition, it is increasingly unlikely that high‐income families interact with middle‐ and low‐income families, eroding some of the social empathy that might lead to support for broader public investment in social programs to help the poor and middle class.
.. Smeeding finds that the gap between the average income of households with children in the top quintile and households with children in the middle quintile has grown, in inflation-adjusted dollars, from $68,600 to $169,300 — that’s 147 percent.
.. Using 2013 census data, Reeves finds that 83 percent of affluent heads of household between the ages of 35 and 40 are married, compared with 65 percent in the third and fourth income quintiles and 33 percent in the bottom two.
.. Democrats are now competitive among the top 20 percent. This has changed the economic makeup of the Democratic Party and is certain to intensify tensions between the traditional downscale wing and the emergent upscale wing.
.. These upscale Democrats have helped fill the gap left by the departure of white working class voters to the Republican Party.
.. voters with annual incomes in the top quintile, who now make up an estimated 26 percent of the Democratic general election vote — are focused on social and environmental issues: the protection and advancement of women’s rights, reproductive rights, gay and transgender rights and climate change, and less on redistributive economic issues.