This article is the first of a three part interview in Germany (via Mark Thoma) of James Galbraith following his presentation on global inequality. The focus in this interview is on the US. He has more to say about Europe in the interviews that will follow.
Galbraith makes several of the points that he made in the interview that I posted earlier. He makes the additional point that growth in capital income is responsible for much of the rise in inequality. The role of credit in the inflation of asset prices, is part of the relationship between credit expansion and growth in inequality and economic instability. His study is about inequality in pretax income. He believes that policy should be focused on steps that reduce pretax inequality. He makes the point, however, that growth in CEO pay may be connected to changes in tax policy that encouraged CEO's to seek higher wages.
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