So Much for Trickle Down: Bold Reforms are Required to Tackle Inequality

Christine Lagarde took time off last week from grappling with the Greek debt crisis to make a speech about inequality. The managing director of the International Monetary Fund chose a nautical metaphor first used by John F Kennedy.
Back in the early 1960s, the then US president hailed economic growth as a rising tide that lifts all boats. That was no longer true, according to Lagarde.
“In too many countries, economic growth has failed to lift these small boats, while the gorgeous yachts have been riding the waves and enjoying the wind in their sails”, she said. “In too many cases, poor and middle-class households have come to realize that hard work and determination alone may not be enough to keep them afloat.”
This trend has been marked in the years since the Great Recession. In the late 1990s and early 2000s, there was some evidence that JFK’s dictum still held true. Real wages for the poor and middle classes in the US and UK rose during a period of sustained economic growth, but the years since 2008 have been a lot tougher for everyone apart from those at the very top.