Below are some of the most interesting articles, quotes and charts I came across this week. Click here to subscribe to our free weekly newsletter and get this post delivered to your inbox each Saturday morning.
Inequality is a topic that has gotten less attention in the years since the onset of the pandemic but signs suggest it may soon be thrust back into the center of the national conversation.
A notable contrast to the inflationary period of the 1970s is the prominence of today's inequality problem.
Different from the broad wage-price spiral experienced back then, the convergence of the current wealth gap disparity and a substantially elevated cost of living is set to… pic.twitter.com/HHbmJDaZK4
— Otavio (Tavi) Costa (@TaviCosta) August 29, 2023
Because the pandemic did little to counteract the self-reinforcing dynamics further entrenching inequalities in both wealth and political power.
'Tax policies favor the rich, the education system favors the already privileged, and inadequately designed and enforced antitrust regulation tends to give corporations free rein to amass and exploit market power.' https://t.co/QUf4nI2UlZ
— Jesse Felder (@jessefelder) September 3, 2023
In fact, pandemic-induced dynamics in the housing market have only made things worse, with elevated prices and interest rates leading to record low affordability.
Housing Affordability Index for first-time homebuyers has fallen to lowest/worst on record per @nardotrealtor pic.twitter.com/cB61kUfMfn
— Liz Ann Sonders (@LizAnnSonders) August 21, 2023
Moreover, the rise of inflation and the monetary response to it have only benefitted those with…
To those with, more is received. To those without, more is taken.
Rising interest rates are expanding what was already a precarious wealth and confidence divide… pic.twitter.com/FNurJ5yNGZ
— Peter Atwater (@Peter_Atwater) August 19, 2023
…while those without have begun to experience greater financial distress for the first time since the Great Financial Crisis.
'More Americans are falling behind on their car loan and credit card payments than at any time in more than a decade, a troubling signal of consumer stress as higher prices and rising borrowing costs are squeezing household budgets.' https://t.co/6erUuiDNR1 pic.twitter.com/OkolqPKFt0
— Jesse Felder (@jessefelder) August 31, 2023
The Fed’s role in all of this is not insignificant and, as these issues only grow more poignant, is unlikely to be overlooked for long.
'Activist, experimental and unsystematic policy promotes yield-seeking speculation, distorts financial markets, drowns the banking system in uninsured deposits, and subjects every corner of the economy to needless risk-taking, typically ending in chaos.' https://t.co/6dYZL9O5z3
— Jesse Felder (@jessefelder) September 6, 2023
Thanks for reading and have a great weekend!
