One of the most urgent questions in economics today is the connection between inequality and growth. That is because one of the big economic facts of our time is the surge in income disparity, particularly between those at the very top and everyone else. The other big fact is the recession set off by the financial crisis and the consequent imperative to jump-start economic growth. Figuring out the relationship between these two tent-pole issues is therefore a good way for economists to spend their time.
As the United States prepares to commemorate the tenth anniversary of the 9/11 attacks this weekend, one of the most striking contrasts is between a country that was united in the face of a foreign enemy a decade ago, and that same nation today, which is so bitterly divided as it confronts domestic challenges of equal, if not greater, magnitude.
Last week at Davos, Chrystia anchored an hour-long daily talk show that featured many of the World Economic Forum’s most exciting participants. Last Wednesday’s edition featured a segments on frugal innovation in India with two top Indian businessmen; the state of trust in business and government today with a behavioral economist and two CEOs; an appraisal of President Obama’s State of the Union from two pre-eminent economists; and more. Here’s the video and the guest list:
As President Barack Obama’s new lieutenants settle into their offices in the White House, talk has turned again to the revolving door between Washington and Wall Street: William Daley, the president’s chief of staff, arrives from JPMorgan Chase, where he earned millions; Gene Sperling, the new top economic adviser, collected $887,727 from Goldman Sachs for advice on a charity project on a recent hiatus from government.
Raghuram Rajan of the University of Chicago Booth School of Business is #26 on Foreign Policy’s list of the 100 Top Global Thinkers of 2010. His big idea is: “capitalist economies work well when everybody has access to the basic conditions they need to compete: access to education, access to health care, and access to finance.” In the absence of these conditions, Rajan argues that a capitalist society will be beset by income inequality, political frictions, and rent-seeking behaviors that subvert healthy competition. Capitalism is at its best when it creates equal opportunity: