While people in the piece argue back-and-forth about the difference between correlation and causation—just because two things happened doesn’t mean one caused the other—it’s hard to argue that there’s no connection whatever:
For his part, Mr. Moss said that income inequality might have complicated links to financial crises. For instance, inequality, by putting too much power in the hands of Wall Street titans, enables them to promote policies that benefit them — like deregulation — that could put the system in jeopardy.
That seems not unreasonable. And:
Inequality may also push people at the bottom of the ladder toward choices that put the financial system at risk, he said. And low-income homeowners could have better afforded their mortgages if not for the earnings gap.
Columbia’s own Glenn Hubbard gets his licks in:
(Mr. Hubbard has a different take: He says many lower-income homeowners should not have had mortgages in the first place. The latest crisis, he says, was caused by policymakers who decided to “democratize credit” by expanding home ownership….)
Okay, that, too.
—The Journal’s Ruth Simon does well to notice that credit card rates are rising while other rates are falling.
“The rules have changed and the goalposts of risk have changed,” says Paul Galant, chief executive of Citigroup Inc.’s Citi Cards unit.
—Finally, the paper also had a useful take on the $2 trillion cash hoard that public companies are sitting on. If it returns to normalized levels, that would mean more than $400 billion in corporate spending. Here’s hoping.