Posted by: Ray Brescia | December 17, 2013

Inequality’s (New) Moment

For the second time now, President Obama has stated that he intends to make tackling economic inequality the focus of his remaining years as President. The Pope is on it too.  Yesterday, Paul Krugman, who is not new to the inequality party, re-iterated his opinion that inequality matters for economic growth and well-being.  He also stated that “inequality probably played an important role in creating our economic mess, and has played a crucial role in our failure to clean it up.”  In research I conducted several years ago, I tried to draw a connection between economic inequality and the foreclosure crisis gripping the nation.  I cross-matched state inequality data against mortgage delinquency rates in each state and here’s the graphic result of that analysis:

inequalityimage

Admittedly, it’s a “scattered” scatter-point graph, but a clear trend emerges.  States with higher inequality tended to have higher delinquency rates, a connection I explored in greater detail here.  In sum, higher inequality means greater social distance, and greater social distance means more predatory conduct: i.e., more people trying to take advantage of each other, something that was quite evident in the lead up to the financial crisis.  Today’s ongoing conversation about inequality is an important one.  One aspect of that conversation must be the extent to which inequality exacerbates social distance, which, in turn, leads to more abusive practices.

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