Ben Bernanke: Income Inequality Is 'Creating 2 Societies'

Federal Reserve Chairman Ben Bernanke believes the growing income gap is "creating two societies" in America.

The central bank chief weighed in on income inequality during an interview Sunday with "60 Minutes" reporter Scott Pelley:

Pelley: The gap between rich and poor in this country has never been greater. In fact we have the biggest income disparity gap of any industrialized country in the world. And I wonder where you think that's taking America.

Bernanke: It's a very bad development. It's creating two societies. And it's based very much, I think, on educational differences. The unemployment rate we've been talking about. If you're a college graduate, unemployment is 5 percent. If you're a high school graduate, it's 10 percent or more. It's a very big difference. It leads to an unequal society, and a society which doesn't have the cohesion that we'd like to see."

In September, new Census figures showed that the income gap between America's richest and poorest was the widest on record.

"The top-earning 20 percent of Americans - those making more than $100,000 each year - received 49.4 percent of all income generated in the U.S., compared with the 3.4 percent earned by those below the poverty line," according to The Associated Press.

The topics of income inequality and public education have followed Bernanke in a personal way since he began his tenure as the leader of the nation's central bank.

In 2009, Bernanke's boyhood home was sold at foreclosure and the junior high school he attended became so dilapidated and worn down, that a student decided to write to Congress and ask for help.

Bernanke's hometown of Dillon, South Carolina, has been hit hard by the recession. According to the latest figures, Dillon County's unemployment rate is 14.8 percent.

In addition to his comments about income inequality, Bernanke also called for reform of the nation's tax code. Most of the interview was devoted to Bernanke's defense of the Fed's decision to buy $600 billion in Treasury securities, a move intended to hold down interest rates.

WATCH: Bernanke's interview with "60 Minutes"

Comments

[XPLSV]

02:27 AM on 01/28/2011

LOL

[Trapster]

07:21 AM on 12/27/2010

Ben is such HYPOCRITE---I hear the commercial from some years ago, "....And I helped!"

[AmosKnows]

04:06 AM on 12/27/2010

This circus clown knows full well how wealth is consolidating since he and his banking buddies (and the government they own) are causing it every day. It has nothing at all to do with education and and everything to do with the skimming of money from the system and Americans. He's the (current) front man for the greatest scam ever perpetuated on a people via a monetary system. A banker can borrow money at 0% interest (or thereabout) and buy US treasury bonds at 3% interest (a debt of we Americans) and then give themselves a nice bonus on the spread. Then take the money they made and buy stock in (say) GE. Make profits and then you take some profits and buy the politicians so that GE can get some nice corporate welfare and make really big profits, further increasing your wealth. You can also give cheap money (credit) to all sorts of people so they can buy the crap your Co makes (cheap until they make one late payment and then you charge a usurious interest rate). Then you take that new wealth and buy more politicians who continue to do whatever you say no matter what the effect is on anyone else. Then when your creditors fail you make the bought politicians pay you what you would have lost and you call it a bailout.

I see the solution is to EDUCATE PEOPLE so they can get jobs in....ah...Japan and China.

[Rafael Moreno]

01:20 AM on 12/19/2010

ok people, quit your bellyaching and do something! Sitting behind a screen and yelling foul isn't going to change anything. Like Gandhi said, "Be the change you want in this world." When i go to a protest there are 20 or 30 people putting themselves on the line to show our anger; but here, there are hundreds even thousands of comments. Where were you when DADT was wavering? Where were you when the Dream Act was going down? Where were you when we were protesting B of A for crackpot foreclosures? Put up or shut up.
Peace Brothers.

[AmosKnows]

04:39 AM on 12/27/2010

The boat has sailed captain, if you're on the deck waiving a war flag there's no one going to be watching.

You might look in to the words "corruption", "control" and "entrenchment" to get a feel for what you are up against. While you are at it look at "propaganda", "divisiveness" and especially "hope (and change)". For it was the immortal words of George W Bush that rang out:

“If that (criminal) boy...believes he is trapped and worthless and hopeless -- if he believes his life has no value, then other lives have no value to him -- and we are ALL diminished” (hint you're not a part of the "ALL")

[kart]

09:54 AM on 12/27/2010

it is easier to blog and complaint....the day it comes knocking at your door you might notice it...to be too late.

[PTorbay]

11:09 AM on 12/18/2010

'...the problem is educational differences...'

Funny guy. Maybe in his world.

"For example, gasoline-powered cars can go fast and travel a long distance between fueling, however they create a lot of ****bad pollution****. They also have low gas mileage and so are expensive to supply with gasoline. Electric cars create ****almost no pollution****, but they cannot go as fast and it is also not easy to find a place to charge your electric car."

And where does the electricity come from to charge these cars? The Green Freakin' Fairy?

The problem isn't 'educational differences', it's STATE-CORPORATE PROPAGANDA and ALL- OUT LOOTING by the MIL.GOV MAFIOCRACY and MERC/USURIST CORPORATOCRACY.

[freedomspeak]

03:05 AM on 12/27/2010

1. ALL OUT LOOTING BY MIL GOVT MAFIA...
YES CORRECT!!!! THE FACT IS WE HAVE THE HIGEST SPENDING OUT OF ALL COUNTRIES IN THE WORLD FOR OUR MIL BUDGET..
2.CORPORTIONS RUN AMERICA NOT WE THE PEOPLE
3. HOW CAN WE GET RID OF THEN BOTH!! ASAP!!

ANY SUGGESTIONS??

[Craig2]

10:07 PM on 12/14/2010

And, you thought Mr. Bernanke and his "900# Gorillas" had your best interest at heart.... sorry for you.

[Craig2]

10:06 PM on 12/14/2010

How can a guy soooo late to the party be the leader of anything?

[Nerdiac]

02:05 PM on 12/07/2010

Gee willikers Mr. Bernanke, thanks for that lesson in economics that only 300,000,000 in the country already knew!

[VoteThemAllOut]

12:57 PM on 12/07/2010

"creating two societies" in America

If he actually believes this - maybe he needs to pull his head out of _____ and actually look at reality.

There have always been two classes - one with and anouther hoping to make it to that group.

Just look at all of thoes 'summer homes' of the rich in Newport, the Hudson Valley, Miami, etc. These were just the summer homes. Yep - two societies are being created.

[Luv2Purple]

11:13 AM on 12/07/2010

Under Reagonomics - VOODOO ECONOMICS - our NATIONAL DEBT TRIPLED - We the people...have never recovered. America for sale has now been sold out! The rich got so much richer that they now own half the country...their half is doing great! While the other half has problems paying for food, medicine, water, rent..... "The HAVES and the HAVE MORES...some call them my base" - George JUNIOR the 2nd - of the Ruling Bush clan. Which America do you live in?

[hamsteronwheel]

11:13 AM on 12/07/2010

we are all hamsters on neocon "financial­­­­­­­­­ly engineered­­­­­­­­­" wheels...

rapacious gluttony corrupts, absolute rapacious gluttony corrupts absolutely­­...

we have had the biggest wall street bonuses ever during this 2nd Depression they "financial­­ly engineered­­" and they are set to exceed them again before the end of this year

madoff was just the tip of the "financial­­­­­­­­­ly engineered­­­­­­­­­" iceberg, acceptable collateral damage, and a token sacrifice

geithner and goldman need to be INVESTIGAT­­­­­­­­­ED­, PROSECUTED­­­­­­­­­, and CLAWED BACK for financial terrorism along with blankfein, fuld, rubin, summers, bernanke, greenspam, dimon, speyer, stephen friedman, prince, weill, immelt, chais, merkin, picower... They all KNEW the public would forget their crimes due to the sunami of cascading informatio­­­­­­­­­n that no common person can process...

after all they finance the major media outlets.

most are NY Fed alumni.

their unmitigate­­­­­­­­­d GREED destroyed middle class mortgages, 401Ks, health care, schools, and the middle class.

This was the greatest REDISTRIBU­­­­­­­­­TI­O­N of wealth in history; UPWARD to the wealthiest few.

by appointing geither, summers, having rubin in a key advisory role, minions of goldman sachs throughout his administra­­­­­­­­­ti­o­n­, and reconfirmi­­­­­­­­­ng bernanke, Obama is complicit and has facilitate­­­­­­­­­d this pillaging of America.

if he is to be remembered as anything other than a wall street facilitato­­­­­­­­­r, if he is to live up to his campaign rhetoric, he has to make Major, Bold, Progressiv­­­­­­­­­e changes that CLAMP DOWN on wall street, private equity, hedge funds, and invest in the middle class!

[madame48]

09:15 AM on 12/07/2010

Greenspan warned of this too...that wild soft hearted hippie....look at history.....greater inequality can lead to destruction of democracy as people are driven to desperation

[Intelligentia]

06:11 AM on 12/07/2010

Good morning! I'm glad you haven woken to decades, if not centuries, not centuries old problem. Now that the majority group is starting to feel the sting of what minorities have been living with for centuries, everybody is now worried about inequality and unemployment! That's a good thing. May be, we can now work collectively for our collective survival.

[lodger16x]

04:34 AM on 12/07/2010

Saying 20% of top income earners getting 49% of income is really avoiding the big problem-1%  of Americans control 50% of all wealth, not just income.
Bernanke and his type never even consider a weath tax. If a person has 1 billion dollars in asserts, but has no income for a year, should he get  to pay zero tax for his use of roads, airports, the military, and the bought and paid for government that favors him?
Look at how REPUBs push for ever-lower estate taxes, and Obama joins them. Under the proposed Obama Surrender, there will be a 5 million $ exemption on any inheritance. So, only one-fourth of 1% of Americans will ever pay a penny of federal estate tax. But REPUB candidates make it sound like Big Gummint is coming to confiscate  Granma Jones' silverware!

[madame48]

09:20 AM on 12/07/2010

oh, and corporate tax should be almost nothing, even though THEY make the most use of our roads, courts, education....not to mention the pentagon budget protecting their empires

[landskroon]

04:15 AM on 12/07/2010

If you need a new coat for the winter, you go from shop to shop to find a coat of your tatse and price. If you are no longer satisfied with your system you might start looking around. Study the systems of Sweden, Germany or the Netherlands. Those countries stil produce millionaires but have a far better functioning social system. The three countries named have great differences in system but, they all funtion well

[skylark]

06:44 AM on 12/07/2010

Excellent point. But Northern Europeans don't embrace meanness as much as Americans do.

[madame48]

09:20 AM on 12/07/2010

very true