On Thursday, March 28, economist Heather Boushey spoke to the Lakeside community about rising inequality and its impact on access to the American dream. Boushey spoke as part of the 2017-2018 BMGI Speaker Series on Economics, and is the executive director and chief economist at the Washington Center for Equitable Growth, a think tank founded to "accelerate cutting-edge analysis into whether and how structural changes in the U.S. economy, particularly related to economic inequality, affect economic growth." A video recording of the lecture is available here.
Boushey opened her assembly lecture to Lakeside Upper School students noting that her interest in economics stemmed from her own local, formative experience. Growing up in the 1980s, the child of a Boeing employee, Boushey saw firsthand how quickly access to the American dream can change. Following her father's layoff during the recession, Boushey witnessed the widespread community impact of Boeing job cuts; including the personal impact of unenrolling from Lakeside School to attend her local public school.
Building on this personal anecdote, Boushey shifted to an examination of inequality's effect on economic growth. Boushey used the "Kansas experiment" as a case study, during which the state government cut taxes and regulations extensively, promising that the "explicitly pro-inequality" approach would lead to growth and improved access to the American dream. After five years, with tax revenue lower than projected, an increase in inequality, wage stagnation, and an economy lagging behind neighboring states, the policies were reversed.
Using the results of the Kansas experiment as a key basis for her thesis that "rising inequality is a drag on growth," Boushey discussed data on wealth and income inequality. Showing trends in the data of rapidly increasing disparity, she noted "income inequality is calcifying into wealth inequality," and highlighted ways in which higher inequality leads to less economic stability, prevents people from contributing economic value, and consolidates economic power. Of this consolidation of industry, she said "it drags down productivity, hinders innovation, and decreases growth," and when combined with consolidated wealth, creates a wealth defense industry that actively blocks access to opportunity and leads to "disinvestment in the collective endeavor."
Closing with a recap of traditional free-market economics, how our current economy differs, and the resulting rising inequality, Boushey left her audience to ponder whether the simple interpretation of Adam Smith's invisible hand has been taken too far. Boushey then answered questions from students on a range of topics, including the economic impact of women in the workplace, the role of antitrust laws in addressing industry consolidation, and how factors like globalization effect the U.S. economy.
Following the lecture, Boushey spent the afternoon with the history and math interdisciplinary class, Geopolitics and Game Theory: Analyzing Power, before giving a similar lecture in the evening for the broader Lakeside community. A recording of the evening lecture is available here.