Recession

Conditional clauses are very important. Mitt Romney's statement yesterday that he's "not worried about the very poor" is based on the supposition that "there's a safety net there," an "ample" safety net at that. This is similar to my saying that I'm not worried about whether my husband will starve to death when I leave town because he knows how to order a pizza.

Engagement with elected leaders by their constituents is a powerful accountability mechanism, and elections are a decisive expression of that function. In a year where poverty and inequality are at historic levels and the prospects for low-income families to improve their circumstances increasingly uncertain, how will these conditions influence both the rhetoric and policy proposals of those seeking elected office and the choices of voters?

There are many reasons why America’s system of economic security is not working. Chief among them is a common factor in almost all of our social policies: they are designed with the assumption that people are constantly employed. For example, most social insurance programs, from Social Security to Unemployment Insurance to Medicare, require people to build up years of contributions before they can access benefits.¹

This is the fifth column in a series by Bruce Jentleson, Professor at Duke University, and Jay Pelosky, Principal of J2Z Advisory. It originally appeared on the Huffington Post.

Over the past century, the United States has experienced two large-scale financial crises: the Great Depression of 1929 and the recent Great Recession, which began in 2007. These periods also represented peaks in the share of U.S. income collected by the top 1 percent of earners. In 1929, the top 1 percent accrued over 22 percent of total national income, including capital gains – a share several percentage points above its historical average, and one that would not be seen again until 2006. Notably, the number of bank failures in the U.S.

Some call this moment the Great Recession. As the hardship has lingered, others have begun calling it the Little Depression. But equating the hard times of the 1930s with the hard times of today is mostly overblown rhetoric. Or is it?

On the surface, the comparisons are obvious: a period of great wealth and exuberance, followed by a stock market crash. After the crash, widespread economic pain. Millions of people out of work, thousands of homes lost. Families going hungry.

This presentation was part of the World Economic Roundtable.  A summary of the Roundtable session can be read here.

This presentation was part of the World Economic Roundtable.  A summary of the Roundtable session can be read here.

At the last World Economic Roundtable, Michael Kumhof, Deputy Division Chief of the Modeling Division of the International Monetary Fund, and Raymond Torres, Director of the International Institute for Labour Studies of the International Labour Organization, came to discuss the relationship between inequality and financial crises.