Blog Posts by Peter Gorenstein

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The Fed kept rates at zero Wednesday and Chairman Ben Bernanke practically guaranteed more action by the central bank to boost the economy during his press conference following the FOMC meeting. (See: Borrowers Win, Savers Lose as Fed Stands Pat — Again)

In justifying it's uber-easy stance, the Fed cited a "subdued outlook for inflation," which has "moderated since earlier in the year as prices of energy and some commodities have declined from their peaks."

That's poppycock, according to Michael Pento, president of Pento Portfolio Strategies and a senior strategy at Agora Financial.

"Inflation is already here," Pento says, citing the following stats:

Inflation: The Consumer Price Index is up 3.9% on a year-over-year basis and Pento (among many others) believes that index grossly underestimates inflation in the real world.

The Misery Index: A combination of unemployment plus CPI inflation, the Misery Index recently hit a 28-year high. (If

Best selling author and Harvard professor Niall Ferguson recently had at it on CNN with Columbia professor and director of the Earth Institute Dr. Jeffrey Sachs over the Occupy Wall Street movemen Sachs - as he recently told the Daily Ticker - thinks Wall Street has acted like robber barons and deserves harsher regulations and increased taxes.

Ferguson sees it differently.

"Many things about Wall street were wrong," he tells Henry Blodget. "But, you can't say all of our problems are because of the criminality of one percent of the population."

What IS to blame for America's growing wealth gap?

In a word: globalization.

"It's globalization that mainly causes inequality by exposing the unskilled in the United States to competition from much cheaper labor in Asia," he says. "That's a much bigger cause of inequality than malpractice on Wall Street."

Ferguson blames the lack of skilled workers in this country on a "very poor public education at the high school level. We are failing kids in

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Europe is a mess; many European nations are in recession or face sluggish growth prospects. Across the Atlantic, the U.S. is plagued by high unemployment, modest growth and a trillion dollar deficit.

After 500 years of predominance, the West is facing some huge challenges. At least that's the premise of Harvard professor, Niall Ferguson's latest book, Civilization: The West and the Rest.

The good news, according to Ferguson is, "we're not absolutely doomed to decline." The bad news, when things turn south it'll happen in a hurry. "Things don't decline gradually, they tend to fall off a cliff," Ferguson tells The Daily Ticker's Aaron Task and Henry Blodget in the accompanying clip. "We don't have as much time as people assume."

In a nutshell, the West is struggling right now because of a decline in the same ideas that propelled us to dominate the global economy. To borrow a phrase from technology, Ferguson calls these ideas the "Killer Aps."

Global markets let out a huge sigh of relief last week that resulted in a big buying spree after European leaders agreed on a framework to work through their sovereign debt crisis.

The problem, even if the plan is to work, which the markets are starting to doubt, is that the deal doesn't really help the economic fundamentals. In fact, austerity has taken hold (justifiably so) across the continent to ensure debt burdens don't get even more out of control. That kind of fiscal contraction can be good for budgets but bad for growth.

In the accompanying video, Aaron Task discusses the global economic outlook with Zanny Minton-Beddoes, economics editor at The Economist.

"I'm less worried marginally than I was about a month ago, but I'm a lot more worried than I was 6-months ago," says Minton-Beddoes. Don't mistake that for a bullish call. Minton-Beddoes is worried about growth prospects in Europe and the U.S.. Things, she says, "still looking pretty grim on both sides of the Atlantic."

As one Occupy Wall Street protester so eloquently wrote on a sign recently: "I bailed out the banks and all I got was a $5 debit card fee."

Well, thanks to protests of millions of other Americans, that $5 fee for debit card purchases may never see the light of day. Having felt the wrath of consumers and politicians alike, Wells Fargo and JPMorgan Chase have decided to drop the charge. And, now add Suntrust to the list of banks revoking the monthly fee.

Bank of America, the first bank to announce the charge and the one that suffered the biggest backlash, is also amending its policy to exempt many customers from the $5 monthly fee. Customers who hold Bank of America credit cards, use directly deposit or hold a minimum balance will not be charged under a new plan.

As Aaron Task and Henry Blodget discuss in the accompanying clip, this is obviously good news for already cash-strapped consumers. After bailing out the "too big to fail" banks, consumers have not been rewarded with much in the

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The Daily Ticker was on location Thursday covering The Economist's Annual Buttonwood Gathering. We caught up with former Treasury Secretary Larry Summers, Blackrock's head of fixed income Peter Fisher and former car czar and investment banking rainmaker Steven Rattner.

In the accompanying clip, Aaron Task talks to Rattner about the growing income inequality problem in America and the subsequent Occupy Wall Street protests. Earlier this week the Congressional Budget Office released a report that showed the top 1% of Americans saw their income grow 275% from 1979-2007 while the rest of the population's income grew by no more than 40%.

Rattner says the growing wealth gap is in part due to globalization. As more companies move jobs where the cost of labor is cheaper that's undoubtedly resulted in fewer middle class jobs. And the ones that remain are paying less.

But, there is a way to reverse the trend.

"How do you create jobs for the long-term?,"

As we've discussed many times on this program, the gap between the rich and the poor is big and getting bigger in America.

"The distribution of market income became more unequal almost continuously between 1979 and 2007," according to the report from the Congressional Budget Office.

Here's how the numbers break down over that time span:

• Income for the top 1% grew 275%
• Income for the 60% in the middle class grew 40%
• Income for the poorest 20% grew by 18%

This data is pre-crisis but it's a pretty safe bet that the trend has not turned in favor of the middle class given the stubbornly high unemployment rate since the Great Recession. It's these issues of high unemployment and the growing wealth gap that are the foundation for the Occupy Wall Street movement that's spreading across the country.

In the accompanying interview The Daily Ticker's Henry Blodget and guest Mark Dow of hedge fund Pharo Management discuss the increasing schism between rich and poor.

Is Occupy Wall Street targeting the wrong group?

It turns out the finance sector only makes up 14% of the top 1% of American earners, says this CNN Money report. Executives in other industries make up more than 30% of America's richest cohort. Medical professionals compose close to 16% and lawyers are 8% of the top 1%.

Meanwhile, no one is immune to the weak economy. The threshold to make it into the 1% club was over $424,00 in 2007. Today, it's $343,927. That's in large part due to the stock market crash. The number of bankers in the elite echelon might also shrink thanks to lousy earnings on Wall Street this year. Lots of bankers, traders and hedge fund managers will still take home big six figure paychecks, but for many it will likely be less than they earned the prior year. Bonuses on Wall Street may fall as much as 40% from a year ago, reports the Wall Street Journal.

Don't expect any tears to be shed on their behalf. "Everyone is above average," Michelle Leder of footnoted.com