Milanovic argues the global financial crisis is a direct result of this kind of ''bad'' inequality taking hold in the US. An excessive build-up of wealth and income in the hands of the financial elite meant they soon ran out of ways to consume it in caviar and champagne, meaning it needed to be invested in ever riskier vehicles. Meanwhile, US politicians sought to hide the uncomfortable truth of declining middle and lower class wealth by turning a blind eye to a massive loosening of credit standards, which enabled people to borrow and feel rich, even as their incomes stagnated. A more equitable path of development ''would have spared the United States and the world an unnecessary crisis''.
Sunday, 23 October 2011
Good inequality and bad inequality
Jessica Irvine in Like cholesterol, inequality cuts both ways looks at one of the major motivators for the Occupy Wall Street movement, inequality in income and wealth, and how there's good inequality and bad inequality. She writes: