Brad DeLong Sez It! Inequality Kills Growth

Okay well he doesn’t say it quite so succinctly.

Or categorically.

In fact he hedges his statement several ways from Sunday, and uses a hundred-and-twenty-three-word paragraph to do so:

The near-consensus view over here at Equitable Growth and at the Equitablog is that U.S. economic growth over the past generation has been very disappointing. Too-much of our economic growth has been wasted producing the wrong stuff and delivering it to the wrong people, and we have failed to properly and productively invest at the rate we could in people, machines and buildings, ideas and organizations, and institutions. The hunch around here is that these two are tightly coupled: that the rapid rise in inequality as a result of the derangement of incentives has both decoupled the links between higher measured real GDP and human economic welfare and material well-being, and has also slowed the growth of our potential to produce real GDP.

I know: he’s being responsible and careful not to overstate the case or torture the known evidence to date.

But still. Goddam liberals.

Happily, he then passes you on to Ashok Rao and Evan Soltas, who comprehensively eviscerate the inequality-causes-growth arguments of Scott Winship.

So at least we’ve got full-throated arguments that the arguments against the inequality-kills-growth position are hooey. We’re getting there.

Cross-posted at Asymptosis.



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