THE ECONOMICS AND POLITICS OF THE LONG SLUMP

In October 2010 unemployment was 9.4%. Blinder argues that without government intervention it "might have been worse." In Weeks 9 and 10 we discussed the responses of TARP (Bush and Obama administration policies) and ARRA (The Obama administration stimulus). The American public, in 2010 at least, did not have a favorable view of either policies and blamed the Democrats for the enduring slump in unemployment.

And there were other issues related to the perception that TARP and ARRA were ineffective and unfair. These include not merely the loss of jobs but the destruction of wealth for millions of Americans, the lack of any substantial criminal prosecution for executive fraud, and the perception that TARP had bailed out banks at the expense of taxpayers. Related to these two issues, of course, were risk-encouraging Wall Street compensation practices, which became better known after the crash of 2008 and were untouched by any meaningful regulation.

A related issue, not mentioned by Blinder, is growing income inequality between the top 1-5% and the rest. Here is a link to some statistics on this issue:

Guide to Statistics on Income Inequality, Center on Budget and Policy Priorities

https://www.cbpp.org/research/poverty-and-inequality/a-guide-to-statistics-on-historical-trends-in-income-inequality

What are some of the key ideas and issues in these debates? Which issue is most meaningful to you? Provide comment, information.