Does the economy grow or shrink? More importantly: Where and for who?

April 5, 2011

image via Vanity Fair

Much media reports economists saying, “the economy is going to be good”, or “the economy is going to be bad”. There is of course a relationship of the political agenda of the outlet, to have a line towards more positive or negative. I find that both of the economic predictions are mostly right. Because for some the economy does good, and for others does not really improve. And this is what I find that the media does not report it too much on it. That is: inequality.

One person who says it clearly, is Berkeley professor Robert Reich. In his predictions of the economy for 2011, he asseverated

“If you’re referring to profits of big corporations and Wall Street, next year is likely to be a good one. But if you’re referring to average American workers, far from good.”

Similar thing is happening in many places, and the media usually puts together countries, states, provinces (and rarely cities), and they say: “the economy has grown (or decreased 1%)”, but they do not say where and who wins or looses this 1% of the economy. It actually it should not be that hard to introduce some coeficients like the Gini index, or even better some type of Human Development Index. I’ve also heard in the news how Sarkozy, it’s trying to do some alternative socioeconomic indexes, “different than the Anglo-Saxon”. I think it should interesting to look at some of them.

I have also noticed that there is an increasing discussion about inequality among bloggers, not corporate outlets but even in some places like The Economist or Vanity Fair. In fact, I have recently tagged with #inequality 10 or 15 articles in my twitter.

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