Growth is going to be low for many years, living standards are not going to rise, and the high levels of income inequality are all likely to contribute to increasing levels of social unrest.
Erm, inequality has fallen over the past couple of years. It always does in recessions.
Because the incomes of the top are more volatile than the incomes of the bottom (for the fairly obvious reason that incomes at the top are market incomes, determined at least in part by market conditions, while incomes at the bottom are State incomes).
Looks like relative poverty is going under the bus and actual poverty is back. The Left win both ways.
In the improbable event of anyone wanting an evidence base for Tim’s claim, this is relevant:
http://www.ons.gov.uk/ons/rel/household-income/the-effects-of-taxes-and-benefits-on-household-income/2009-2010/index.html
It shows that the Gini coefficient for post-tax and benefit incomes fell from 39% to 37% between 2006-07 (the last pre-recession year) and 2009-10.
In this sense, Tim’s right.
I suspect, however, that Blanchard might reply that this measure (and the 90/10 ratio) is insufficiently sensitive to moves in the incomes of the top 1% or 0.1%.
Market incomes pay for state incomes. If market incomes suffer, state incomes cannot remain immune
“If market incomes suffer, state incomes cannot remain immune” … you’d be surprised.
Blanchflower only refers to high levels, he doesn’t say they are getting worse.