Although we work through financial markets, our goal is to help Main Street, not Wall Street.
Janet YellenRead
After adjusting for inflation, the average income of the top 5% of households grew by 38% from 1989 to 2013. By comparison, the average real income of the other 95% of households grew less than 10%.
Interpretation
The wealth gap between the top 5% and the rest of the population has significantly increased over a few decades.
This quote by Janet Yellen highlights the growing disparity in income growth between the top 5% of households and the remaining 95% from 1989 to 2013. It underscores the widening economic inequality in society, as the wealthy have seen their incomes rise substantially, while the majority have experienced negligible growth in their earnings.
In practice
During a speech on economic policy, one could use this quote to illustrate the challenges of income inequality.
Although we work through financial markets, our goal is to help Main Street, not Wall Street.
We need to keep in mind the well-established fact that the full effects of monetary policy are felt only after long lags. This means that policy makers cannot wait until they have achieved their objectives to begin adjusting policy.
A clear lesson of history is that a 'sine qua non' for sustained economic recovery following a financial crisis is a thoroughgoing repair of the financial system.
Transparency concerning the Federal Reserve's conduct of monetary policy is desirable because better public understanding enhances the effectiveness of policy. More important, however, is that transparent communications reflect the Federal Reserve's commitment to accountability within our democratic system of government.
For decades, the pace of technological change in manufacturing has outstripped that in the economy as a whole. And, so, firms - manufacturing firms - have found it easier to continue producing by - with - reducing their workforces.
Inequality has risen to the point that it seems to me worthwhile for the U.S. to seriously consider taking the risk of making our economy more rewarding for more of the people.
If you followed this economic crisis and you do not think that the world is getting flatter, you are not paying attention. We saw the entire global economy at one time acting totally in sync. The real truth is the world is even flatter than I thought. Our mortgage crisis is killing Deutsche Bank. You still don't think the world is flat?
The focus of our public discourse has been on how American companies are competing with Japanese, German, and other foreign companies. What this allows us to ignore is how each of those American companies is really in competition with the families of the workers. That's the real competition.
The benefit of appointing a hawkish central banker is the increased inflation-fighting credibility that such an appointment brings.
People who live in poor countries have to be entrepreneurial even just to survive.
Addressing the weaknesses of capitalism will require us, above all, to do two things: first, to take a long-term perspective, and second, to re-set the priorities of business.
Unless you reduce the long-term spending burden, you cannot cut taxes in any lasting way, but can only shift the burden of taxes from the present to the future.
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