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This is something I was against all along. A few others also. Sadly, many of those actually hurt by this for some odd reason supported it all.
A few years ago, one of Karen Petrou’s banking clients gave her an unusual assignment: It wanted her to write a paper laying out “the unintended consequences of the post-financial-crisis capital framework.” Petrou is the co-founder of Federal Financial Analytics Inc., a financial services consulting firm in Washington that focuses on public policy and regulatory issues. She is also, as the American Banker once described her, “the sharpest mind analyzing banking policy today — maybe ever.” Whenever I’m writing about banking issues, she’s the first person I call.
Writing that paper caused Petrou to ask a question she’d never really considered before: Did the bank regulations enacted after the 2008 crisis — along with the Federal Reserve’s post-crisis monetary policy — exacerbate income inequality? Her answer, which she laid out in a series of blog posts, as well as a lecture at the New York Federal Reserve in March, was yes. “Post-crisis monetary and regulatory policy had an unintended but nonetheless dramatic impact on the income and wealth divides,” she wrote recently.
That particular sentence was in a blog post devoted to a recent study by the Federal Reserve Bank of Minneapolis that evaluated income and wealth inequality from 1949 to 2016. The study certainly seems to validate her thesis. It shows that between 1989 and 2007, the top 10 percent increased their share of the nation’s wealth by just 5.8 percent. But in just the next nine years, between 2007 and 2016, the richest Americans captured an additional 8.3 percent of the country’s wealth. Meanwhile, those in the 50 percent to 90 percent wealth bracket saw their share of the nation’s wealth drop by 17 percent, and those in the bottom 50 percent saw a 52 percent drop. The single biggest variable that changed after 2007 was the way banking was conducted and regulated.
In the end this is why we have Trump. He is not making it better and we will move past him also but will enough people figure out that the system is not working for them?
P.S. I disagree with her that this was unintended.
Good post. Regarding your third paragraph in italics, the top 10% have their money in stocks. 50% to 90% or the upper middle class have their money invested in their house. If you add the threat felt by the upper middle class to the truly disenfranchised you get a President elected by a protest vote.
Kind of ironic but the next article in the link you posted infers that the income equality decline is primarily due to the mortgage meltdown and the economic policies of the last 20 years.
That had a lot to do with it as in a part of the overall discussion BUT the reason for the growing gap is how that was dealt with.
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Banks can argue all they want about regulations "slowing them down" but Ill take that over another meltdown any day. Why don't people see that the financial systems recovery was done on the backs of the 90% who don't benefit high asset liquid levels?
We now have this idea that the markets must grow at an ever growing rate no matter what. No matter the fundamentals. No matter who it harms. As of yet, no one has explained how this is Capitalism. Capitalism allows the losers to lose without the government stepping in to see that their wealth is restored especially at the cost to others.
Good post. Regarding your third paragraph in italics, the top 10% have their money in stocks. 50% to 90% or the upper middle class have their money invested in their house. If you add the threat felt by the upper middle class to the truly disenfranchised you get a President elected by a protest vote.
This all happened under Obama also. Those who were disenfranchised over all of this refused to support Hillary also as she would have continued this every bit as much as Trump has.
This all happened under Obama also. Those who were disenfranchised over all of this refused to support Hillary also as she would have continued this every bit as much as Trump has.
Without reading this entire thread I agree with your point as I see it. The result as i see it though is that current administration is doing nothing to improve the structural defects in the system.
Rather than helping the 80% they are enriching the top 20% at stunning levels on the backs of the average citizen. This is not what he promised.
The meltdown didn’t help but the main problem is stagnant income. CEO and upper management pay has increased much faster than the average worker.
There is no reason for CEO’s to walk away with millions even when they get fired. The problem is these people sit in each other’s boards so they just pass golden parachutes around to each other.
Another problem is the same banks who gave people subprime when they didn’t need them were bailed out. Did they lose their jobs? Nope. They gave each other bonuses.
Without reading this entire thread I agree with your point as I see it. The result as i see it though is that current administration is doing nothing to improve the structural defects in the system.
Rather than helping the 80% they are enriching the top 20% at stunning levels on the backs of the average citizen. This is not what he promised.
Why do the rich need to pay less taxes every time the GOP controls washington? They never cut spending but they always cut taxes on the wealthy.
Without reading this entire thread I agree with your point as I see it. The result as i see it though is that current administration is doing nothing to improve the structural defects in the system.
They absolutely are not.
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Rather than helping the 80% they are enriching the top 20% at stunning levels on the backs of the average citizen. This is not what he promised.
The lesson those who do not support must learn is that Obama also did not do what he promised and that is why Trump is president.
If President Obama had been the person Candidate Obama promised to be, there is no President Trump.
The Bush cuts were laid out for many years...far longer than his reign. Of course, they never should have been made in the first place (they were paid out of debt and deficit) and, even if made, he should have rolled them back as soon as we went to war or after 9/11.
But without finding you the exact links.....I seem to remember a GOP Congress..and the Congress makes law, right? And also Obama attempted a Grand Bargain, right? And the GOP wouldn't have it, correct???
I remember lots of stuff. And even when Obama compromised (remember that word?) with the GOP big spenders, some parts of the tax cut were rolled back....Remember?
Do you actually know this stuff, or are you catering to those who like 5 word answers???
The Bush cuts were laid out for many years...far longer than his reign. Of course, they never should have been made in the first place (they were paid out of debt and deficit) and, even if made, he should have rolled them back as soon as we went to war or after 9/11.
But without finding you the exact links.....I seem to remember a GOP Congress..and the Congress makes law, right? And also Obama attempted a Grand Bargain, right? And the GOP wouldn't have it, correct???
The bargain including leaving the tax cuts. Obama was willing to shut down the government over lots of things but not the tax cuts.
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I remember lots of stuff. And even when Obama compromised (remember that word?) with the GOP big spenders, some parts of the tax cut were rolled back....Remember?
Do you actually know this stuff, or are you catering to those who like 5 word answers???
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