Opinion

Nicholas Wapshott

Bill de Blasio and the politics of inequality

Nicholas Wapshott
Jan 6, 2014 16:39 UTC

The election of a new New York mayor usually has little political significance for the rest of the nation. Often it is a local anomaly in a city that makes its own political weather and does not follow trends found in the rest of America. Sometimes it is an expression of private grief. But the inauguration of Bill de Blasio was different.

Not only did he win handily on an unapologetically progressive ticket, his installation was presided over by President Bill Clinton and endorsed by the presence of Hillary Clinton, whose failure to declare whether she will run in 2016 is causing all other Democratic wannabes to stay their hand. The Democrats appear to be saying that if Mrs. Clinton wants the job, it is hers, so until she decides, donors won’t waste a single cent on backing anyone else.

Ever aware of the latest undercurrents of Democratic thought, President Clinton alluded to the debate that is gaining traction among not only Democrats but among Independents and even some Tea Party members, too: the gap between the rich and the poor is too much to bear and must be addressed.

Referring to “this inequality problem [that] bedevils the entire country,” President Clinton described income inequality as “not just a moral outrage. It is a horrible constraint on economic growth. … We cannot go forward if we don’t do it together.” It echoes President Obama’s belief that “dangerous and growing inequality and lack of upward mobility” is “the defining challenge of our times.”

The Democrats think they are on to a winner. Poll after poll after poll shows that Americans of all stripes are appalled by what they perceive as income inequality and what that is doing to the American dream of being able to rise from nothing through the ranks if you have the ability and the persistence and are willing to work hard. While Republicans think they can win by harking on past events, exploiting the inadequacies of Obamacare and resurrecting the raid on Benghazi, Democrats think they will prosper by highlighting the twin evils of greed and inequity.

Does Japan show us the way out of secular stagnation?

Nicholas Wapshott
Dec 2, 2013 16:46 UTC

Is America’s economy adrift in the doldrums? Lawrence Summers, perhaps the nation’s most inventive applied economist, thinks so. Speaking to an IMF forum last month, he described America’s current condition as “secular stagnation” in which we are stuck in a rut of weak demand, low growth, and low employment. This is the “L-shaped” recovery, or — strictly speaking, non-recovery — some warned about after the financial freeze of 2008. It is also sometimes dubbed “the new normal.”

“We may well need in the years ahead to think about how we manage an economy in which the zero nominal interest rate is a chronic and systemic inhibitor of economic activities, holding our economies back below their potential,” Summers said. The phenomenon is not new; after all, before 2008, when Alan Greenspan had ensured endless cheap money through low interest rates, leading to asset bubbles, the real economy did not respond.

“Even a great bubble wasn’t enough to produce any excess of aggregate demand,” Summers said. “Even with artificial stimulus to demand, coming from all this financial imprudence, you wouldn’t see any excess.”

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