Essay on recession 2008

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Essay on recession 2008

If an economy is to function well, people need incentives to work hard and innovate. The pertinent question is not whether income and wealth inequality is good or bad.

It is at what point do these inequalities become so great as to pose a serious threat to our economy, our ideal of equal opportunity and our democracy. We are near or have already reached that tipping point.

The dysfunctions of our economy and politics are not self-correcting when it comes to inequality. But a return to the Gilded Age is not inevitable. It is incumbent on us to dedicate ourselves to reversing this diabolical trend.

But in order to reform the system, we need a political movement for shared prosperity. Herewith a short summary of what has happened, how it threatens the foundations of our society, why it has happened, and what we must do to reverse it.

What has Happened The data on widening inequality are remarkably and disturbingly clear. The Congressional Budget Office has found that between andthe onset of the Great Recession, the gap in income—after federal taxes and transfer payments—more than tripled between the top 1 percent of the population and everyone else.

The after-tax, after-transfer income of the top 1 percent increased by percent, while it increased less than 40 percent for the middle three quintiles of the population and only 18 percent for the bottom quintile. The gap has continued to widen in the recovery.

According to the Census Bureau, median family and median household incomes have been falling, adjusted for inflation; while according to the data gathered by my colleague Emmanuel Saez, the income of the wealthiest 1 percent has soared by 31 percent.

In fact, Saez has calculated that 95 percent of all economic gains since the recovery began have gone to the top 1 percent.

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Wealth has become even more concentrated than income. In the United States, consumer spending accounts for approximately 70 percent of economic activity.

If the middle class is forced to borrow in order to maintain its standard of living, that dampening may come suddenly—when debt bubbles burst.

Consider that the two peak years of inequality over the past century—when the top 1 percent garnered more than 23 percent of total income—were and Each of these periods was preceded by substantial increases in borrowing, which ended notoriously in the Great Crash of and the near-meltdown of The anemic recovery we are now experiencing is directly related to the decline in median household incomes aftercoupled with the inability or unwillingness of consumers to take on additional debt and of banks to finance that debt—wisely, given the damage wrought by the bursting debt bubble.

We cannot have a growing economy without a growing and buoyant middle class.Nov 13,  · Mid-wage occupations, paying between $ and $ per hour, made up about 60 percent of the job losses during the recession.

But those mid-wage jobs have made up just 27 percent of . Through timely, in-depth analysis of companies, industries, markets, and world economies, Morgan Stanley has earned its reputation as a leader in the field of investment research. Browse more than episodes, and find your favorite stories by topic, contributor, and year.

Apr 30,  · This indicator is pointing TOWARD a recession. 2. “Asset prices swelled before the two most recent recessions: stock prices before the dot-com bust in and housing prices before the.

Essay on recession 2008

The Nationalist's Delusion. Trump’s supporters backed a time-honored American political tradition, disavowing racism while promising to enact a broad agenda of discrimination.

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Essay on recession 2008
Robert Reich (How to Shrink Inequality)