CBS's MoneyWatch is closely monitoring the interest rates set by the Fed and is eager to see what will happen at the September meeting of the Federal Reserve. TCF fellow Mark Thoma explains that if the rates are increased too soon, job market might remain below the full employment level for much longer than if rates remained low, but if raised too late, there is the fear of inflation.
"Yet with interest rates already as low as they can go, this mechanism is broken, and the consequence is a level of aggregate demand that is insufficient to support full employment. In such a situation, the last thing you want to do is raise interest rates and make the situation worse," says Thoma.
Read the rest of Thoma's interest rate predictions from CBS Moneywatch.
The longtime quest to reduce income inequality is still a mystery to many politicians. The Republican ideal that hints at “you’re on your own no matter what bad luck comes your way” remains popular among the wealthy elite that don' believe they should share their income with their lower income counterparts. Despite what some believe to be the best designed fiscal policy, TCF fellow Mark Thoma says that the root of today's economic issues lies in inequality and lack of income redistribution.
Economists must come up with a solution to the inequality problem. That doesn’t mean taking a position on whether a particular redistribution, education, or other policy to reduce inequality is good or bad. No matter what we do, there will be winners and losers, and economists can help to determine the most effective, least distortive means of accomplishing the goal of a more equal society, both in terms of opportunity and outcomes, without taking a position on which alternative to pursue.
Thoma's article can be read in the Fiscal Times.
WUWM public radio recently interviewed TCF fellow Paul Jargowsky about his report Architecture of Segregation, specifically in regard to the changing face of Milwaukee, Wisconsin. The metropolitan area of Milwaukee has one of the fastest growing concentrations of Black and Latino people living in neighborhoods of poverty—nearly 45 percent of African Americans now living in high poverty neighborhoods compared to 39% in 2000.
Jargowsky attributes much of the change to so-called "white flight." "We still have an issue in this country with the way metropolitan areas are developing, in that we have suburban jurisdictions growing very fast," he says. "Faster than is needed to accommodate population growth; and they're also using zoning and other tactics to essentially create economically segregated jurisdictions.
Listen to the interview and read the rest of the article from WUWM's show Lake Effect.
TCF fellow Harold Pollack comments on the fate of individuals who are the recipients of intellectual and developmental disability (IDD) services. In his article for the Chicago Sun Times, he describes the unfortunate circumstances of some states' tax laws that result in minimal funding for allowances and other disability services.
Residents of intermediate care facilities received $30. Imagine if that were all you had for an entire month to cover everything from the copayment on some medicine, a dental visit, the occasional tee-shirt or pair of socks, cup of coffee, or trip to McDonald’s.
Read Pollack's full Opinion article.
Florida's newspaper, the Tampa Bay Times, wrote about TCF's report, Architecture of Segregation, in a recent article, citing the report's finding that the increased frequency of police shootings in the news of late is no accident. The report specifies Jargowsky's findings:
The first is that "federal and state governments must begin to control suburban development so that it is not cannibalistic: new construction must be roughly in line with metropolitan population growth."
Second, "every city and town in a metropolitan area should be required to ensure that the new housing reflects the income distribution of the metropolitan area as a whole. To some, this suggestion may seem like a massive intervention in the housing market. In fact, exclusionary zoning is already a massive intervention in the housing market that impedes a more equitable distribution of affordable housing."
Read the full article here.
In recent decades, and especially since 2000, the richest Americans have enjoyed soaring income and wealth while the rest of the population's living standards have stagnated. The Century Foundation was one of the first institutions to raise serious concerns about these trends and propose ideas for improving economic conditions for all Americans- not just the fortunate few.
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