Does income inequality lead to financial crisis?
There’s long been a growing gap between the rich and the poor in the United States, but some believe that disparity could actually cause more harm than previously thought. A group of economists, sociologists, and legal scholars are saying there may be a correlation between income inequality and financial crises. One possible link between the two, according to David A. Moss, an economic and policy historian at the Harvard Business School could be the fact that Wall Street titans wield power that, in turn, allows them to promote policies which benefit them, but not necessarily the financial system as a whole.
Louise Story, finance reporter for The New York Times, wrote an article about this theory, which has garnered an overwhelming number of responses. Story says, “[The theory] makes a lot of sense to people. Everyone is trying to make sense of how we have such a big crisis…[and] it’s not just looking at financial [factors]. It’s relateable.”
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