When the Federal Reserve Governor, Sarah Bloom, says “that income inequality and government cutbacks may slow economic growth for years” she is not just saying this is a “growth” recession. It is an admission that income inequality should be a major long-term concern for our fiscal policy makers. This is not an easy or light-hearted admission from the Federal Reserve whose policies are founded upon our historical and traditional capitalistic policies and beliefs. Along with her recommendation that the Fed study the relationship between income and wealth inequality and how it impacts monetary policy, this is a warning: Inequality May Hurt Economic Growth. As a case in point, the following article illustrates just how pervasive the inequality gap is becoming: Suburban Poverty Soaring
The Organization for Economic Cooperation and Development (OECD) which has long been critical of our blindness to the need for change here in the United States has recently issued the following report: OECD 2013 Report: Inequality and Poverty. This article from the Huffington Post summarizes the report: Wealth Gap Widens in Rich Countries.
As the wealth gap widens among the races here in the U.S., Racial Wealth Gap Widened, the problems associated with an economy built around war and divisiveness become increasingly evident, Israel Poverty Rate Highest in Developed World, and we are not that far ahead (please see slideshow). I am far from surprised at Israel’s performance in the OECD study. I see the results as a function of the principles and mechanisms its economy is built upon which has led to a highly militarized economy…an economy that must constantly seek legitimacy for its existence. I do not believe that Israel’s need to sow discord in the region is solely based upon it’s fear of attack or a desire to seek legitimacy through military means but rather on it’s need to feed its expansive military industrial complex (traditional as well as R & D projects) that not only needs fiscal support but a large supply of soldiers (irrespective of conscription).
Educational, racial, social & economic inequality…social division…weaponization & militarism…are some of the main pillars of poverty.