Tags: Roubini | Baltimore | income | inequality

Roubini: Baltimore Violence Stems From Growing Income Inequality

By    |   Thursday, 30 April 2015 02:00 PM

While the death of Freddie Gray may represent the flashpoint for this week's violence in Baltimore, growing income inequality represents a primary cause, says star economist Nouriel Roubini of New York University.

"We've seen race riots in parts of the United States because lots of people are poor and angry and resentful," he tells CNNMoney.

"The solution can't just be to send more police in the streets or the National Guard. People are desperate. We have to deal with this issue of poverty, of unemployment and economic opportunities."

In Baltimore, for black households the median household income is just $33,610, more than 40 percent below the $60,550 total for white households.

"We have to deal with this gap because if we don't deal with it, eventually the biggest political problem is not going to be a geopolitical problem from the Middle East or Ukraine, Russia or Asia, but will be domestic," Roubini notes.

The Federal Reserve's massive easing hasn't helped, he maintains. "All of this easy liquidity has not led to a strengthening of job creation, wages and opportunity. The gap between Main Street and Wall Street is widening."

Meanwhile, billionaire real estate mogul Jeff Greene says the government should spend $1 trillion on infrastructure to fight growing income inequality.

"The global equalization of wages and the exponential growth in technology has created a job-killing machine that's only going to get worse," he told the Milken Institute Global Conference, CNBC reports.

Greene, who made much of his money betting against sub-prime mortgages during the 2008 financial crisis, says raising taxes on the wealthy and investing in education and training would help curb inequality.

But with interest rates close to record lows, the government would do better to take on another $1 trillion in debt to improve infrastructure.

"If we added an extra $1 trillion to national debt, we could rebuild these underground pipes and schools and hospitals and give hope to people," he said. "That would get the country through this difficult period. And it would help make the U.S. more competitive again."

But what about our already stretched debt burden — $18 trillion for the federal government, compared to GDP of $17 trillion?

"Sure $1 trillion is a lot, but it's not a lot relative to the total debt," said Greene, a major property owner in West Palm Beach, Fla., including the Strand Apartments on the Intracoastal Waterway.

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While the death of Freddie Gray may represent the flashpoint for this week's violence in Baltimore, growing income inequality represents a primary cause, says star economist Nouriel Roubini of New York University.
Roubini, Baltimore, income, inequality
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2015-00-30
Thursday, 30 April 2015 02:00 PM
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