If you aren’t morally outraged by the idea of some Americans having ludicrously more money than others and the death of the American dream, then perhaps you will be moved to see that income inequality is actually killing people.
And if you’re still not bothered, then we’ll look at the economic impacts.
First, three charts from The Equality Trust, which are “pretty compelling” according to a research note out today from Société Générale strategist Albert Edwards.
Inequality is killing babies:
Inequality is killing adults:
Inequality is causing health and social problems (based on an index that looks at life expectancy, maths proficiency and literacy, infant mortality, homicides, imprisonment, teenage births, trust, obesity, mental illness including drug and alcohol addiction, and social mobility):
It’s this last chart in particular that could present economic problems.
As noted by Edwards:
Set aside any moral or political concerns you may have about rising income inequality worries about poverty, justice, undue political influence or even social mobility. According to [Kemal] Dervis, co-author of the book, the research collected in “Inequality in America,” shows that a growing number of economists suspect that once inequality passes a certain point it may jeopardize economic stability and economic growth. As the book argues, rebalancing of the distribution of income may play a role in unlocking the U.S. economys growth potential in a sustainable way.
That is exactly the point Warren Buffet, Bill Gross and Stanley Druckenmiller make. You don’t have to be a communist to conclude that high levels of inequality not only adversely affects long-term growth, but also increases the economy’s vulnerability to recession.
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