easy credit means that while india was focused on educating workers, the u.s. was falling behind. while china was building world-class infrastructure, the u.s. was crumbling. while germany was establishing itself as the factory floor of the western world, the u.s. was losing ground. we already had a consumption-based economy. we just made it bigger. people felt good. they kept up with and in some cases overtook the joneses. one economist is a distinguished professor of finance at the university of chicago, former chief economist with the international monetary fund. and he blames politicians for making easy credit available to their constituents thereby masking that growing income disparity. that s the inequality debate you hear so much about these days. thank you for joining us. tough cutbacks have not worked in europe. we ve got unemployment in the eurozone of more than 11%. much higher in some countries. and many argue that the solution is more government spending. the poi
solutions, many of them, lie with congress. but there are causes and there are many of them. a simple answer would be the cleanest, the most convenient, out of control deficits or stimulus. it s barack obama or george w. bush, but it s not that simple, not that satisfying. one cause however does stand out amongst many. cheap and ample credit. for years the ability of almost every working american to access more credit than they should have been able to, masked the underlying fact that lower and middle class incomes were not rising. people felt and in many cases actually were wealthier than their salaries or socioeconomic status would suggest. getting a loan and buying a house, often more house than you needed or would have expected to buy, made you feel wealthier. as more people bought those houses, your net worth increased. you borrowed against that house, maybe. maybe you put your kids through college with the money. maybe you bought another house or financed a small busine
was broken. easy credit means that while india was focused on educating workers, the u.s. was falling behind. while china was building world-class infrastructure, the u.s. was crumbling. while germany was establishing itself as the factory floor of the western world, the u.s. was losing ground. we already had a consumption-based economy. we just made it bigger. people felt good. they kept up with and in some cases overtook the joneses. this economist is a distinguished professor of finance at the university of chicago, former chief economist with the international monetary fund, and he blames politicians for making easy credit available to their constituents thereby masking that growing income disparity. that s the inequality debate you hear so much about these days. thank you for joining us. tough cutbacks have not worked in europe. we ve got unemployment in the eurozone of more than 11%. much higher in some countries. and many argue that the solution is more government spen
solutions and right now, those solutions, many of them, lie with congress. but there are causes and there are many of them. a simple answer would be the cleanest, the most convenient, out of control deficits or stimulus. it s barack obama or george w. bush, but it s not that simple, not that satisfying. one cause however does stand out amongst many. cheap and ample credit. for years the ability of almost every working american to access more credit than they should have been able to, masked the underlying fact that lower and middle class incomes were not rising. people felt and in many cases actually were wealthier than their salaries or socioeconomic status would suggest. getting a loan and buying a house, often more house than you needed or would have expected to buy, made you feel wealthier. as more people bought those houses, your net worth increased. you borrowed against that house, maybe. maybe you put your kids through college with the money. maybe you bought another h