What I Learned This Week

The two Americas: Why, now more than ever, inequality must be confronted to protect economic stability.

“Average statistics camouflage what is happening in the economy, which could lead to dangerous miscalculations,” Bridgewater’s Ray Dalio wrote in a note released on LinkedIn this week. He was urging policymakers to consider inequality in their decision making. “We broke the economy into two economies—that of the top 40% and that of the bottom 60%,” he went on. The top 40% averages ten times the wealth of the bottom 60%. Only a third of the bottom 60% saves any of its income. Only by understanding the bifurcation of America can the Fed “run an appropriate monetary policy.” With inequality most-often presented as a moral issue, it is easy to underestimate the economic urgency of Dalio’s plea.…

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