Thanks in large part to the Occupy Wall Street movement, the debilitating effects of income inequality have been hoisted into the national spotlight. But in addition to killing economic growth and economic mobility, income inequality also exacerbates political inequality.

Today, ThinkProgress spoke with MIT economist Daron Acemoglu, whose new book, Why Nations Fail (co-written by James Robinson), looks at the effect politics and policy have on economic growth and prosperity. Acemoglu said that he believes the most “pernicious” effect of income inequality is that it drains political power from lower- and middle-class Americans and allows the richest to then begin “changing the rules in their favor”:

I think there’s a lot of debate about the economic impact of income inequality. There’s literature on how greater inequality might slow economic growth because it creates a less conducive environment for consumer demand or credit. But at the end, my view, and that of our book with James Robinson, is that the more pernicious effect of economic inequality comes indirectly through its impact on political inequality. it’s a general pattern throughout history, and we see around today, that when economic inequality increases, the people who have become economically more powerful will often attempt to use that power in order to gain even more political power. And once they are able to monopolize political power, they will start using that for changing the rules in their favor. And that sort of political inequality is the real danger that’s facing the United States.

Watch it:

Acemoglu added that the Supreme Court’s decision in Citizens United and the growth in Super PAC spending are only going to make this problem worse by increasing the importance of money in politics. “We already had a very serious problem,” he said. “Instead of trying to stem that tide, we’ve done the opposite and we’ve now opened the sluice gate and said you can use that money with no restrictions whatsoever.” According to calculations by Council of Economic Advisers chairman Alan Kruegar, the shift in income inequality over the last three decades has been the equivalent of moving $1.1 trillion of income from the 99 percent to the top 1 percent every single year.

Last summer, employees at the Target store in Valley Stream, New York came together to organize a union to address a number of issues they were facing, in particular the startling reality that “many of them earned too little to support a family or afford health insurance, forcing some to rely on food stamps and Medicaid for their children.” The Valley Stream store would have been the first Target in the country to unionize.

For years, Target has enjoyed a reputation as the antithesis of Walmart. But like its big box counterpart, Target is notoriously anti-union — the company reportedly shows new hires a video warning against unionizing, threatening them with fewer promotions and less flexible hours if they were to organize.

When the workers in Valley Stream came forward with the idea of organizing under United Food and Commercial Workers (UFCW) Local 1500, Target ramped up its efforts to stifle the movement. Ultimately, the workers’ vote to unionize failed, due in large part to intimidation tactics employed by the company to strong-arm them into caving. In fact, Target is currently under investigation by the National Labor Relations Board for illegally interrogating and threatening Valley Stream employees.

Yet, Target’s campaign against the workers in Valley Stream presses forward. Last week, company management informed employees at the Valley Stream location that the store will be temporarily closed for six-months for renovations. Employees feel the move is in retaliation for their attempts to unionize; while the Valley Stream location is one of 1,100 other stores currently undergoing renovations, the majority of those locations are slated to remain open throughout.

And while “eligible employees” have been invited to transfer to other Target branches or take an unpaid leave of absence until renovations have been completed, “the most vocal pro-union employees have not been deemed eligible to return:”

Sonia Williams, one of the most active pro-union employees who has frequently spoken to the media, including The Huffington Post, found out last week that she wasn’t eligible to transfer or apply for unpaid leave, she said. She was offered, however, a severance package for her nearly 10 years of work that amounts, after taxes, to about $800, Williams said.

Management told her she was “on final warning,” but did not explain why, Williams said, noting that she had received no prior written or oral notice. Management had met with her once previously about one matter but her manager told her it had been resolved, she said.

UFCW Local 1500 is seeking to block the closure and possibly overturn the results of last year’s election with the aim of conducting a new vote. “This is just as horrible as it gets,” said Pat Purcell, assistant to the president of Local 1500. “It’s right out of the Walmart playbook. That store is being closed in retaliation for union activities of workers.” A Target spokeswoman, on the other hand, maintains that the plans for remodeling have been in the works for “a year and a half or two,” conveniently predating the union’s campaign.

– Fatima Najiy

The House Republican Budget, in addition to providing $3 trillion in tax breaks to the rich and corporations, would gut the food stamp program, denying food assistance to millions of Americans. And that’s not the only way in which the budget, authored by House Budget Committee Chairman Paul Ryan (R-WI), would force the pain of austerity onto the poorest Americans.

In fact, according to a Center on Budget and Policy Priorities analysis, 62 percent of the cuts in Ryan’s budget would come from programs aimed at aiding low-income Americans, including Medicaid and Pell Grants.

There are even more cuts aimed at low-income Americans in this budget than there were in Ryan’s last effort. And these cuts would come on top of the cuts to discretionary spending already mandated by the Budget Control Act, the spending plan that Congress adopted during the debt ceiling debacle last August.

The GOP budget actually reneges on that deal, cutting discretionary spending even deeper, and as CBPP’s analysis shows, the pain of slashed federal spending would be pushed onto those Americans who can least afford it, while the richest Americans would receive huge, new tax breaks. In fact, under Ryan’s plan, while the poor would lose access to programs upon which they depend, millionaires would receive a $187,000 tax break.

After Romney Adviser Eric Fehrnstrom said everything in the campaign resets before the fall “like an Etch A Sketch,” Rick Santorum and Newt Gingrich took the gaffe as an opportunity to portray the former Massachusetts governor as a flip-flopper. Santorum told voters that Romney will “say what he needs to say to win the election that is before him,” and Gingrich used the toy as a prop during a campaign stop.

And during a speech in Florida today, even Vice President Biden used the toy analogy to attack Romney for his support of the GOP’s radical Cut, Cap, And Balance plan:

Gov. Romney supports Cut, Cap, and Balance, which is yet another demonstration that there is no daylight between Gov. Romney and Republican leaders on the most important issues facing this country. And not even Romney’s Etch A Sketch can change that.

Watch Biden’s comments:

As we’ve noted before, Cut, Cap, and Balance “would require a 25 percent cut to everything in the federal budget — from Social Security to veterans’ benefits to the Pentagon to education.”

There are plenty of reasons that the House Republican budget authored by Budget Committee Chairman Paul Ryan (R-WI) would be detrimental for the economy, including its trillions in tax giveaways to the rich and its undercutting of food assistance to millions of low-income Americans. Added to the mix, the budget would deal a blow to the housing market, undercutting this vital sector of the American economy when it can least afford it.

The budget says, without very many details, that the GOP would wind down government backed mortgage giants Fannie Mae and Freddie Mac, while changing accounting rules to make Federal Housing Agency programs appear more expensive than they are. As the Center for American Progress’ David Min and John Griffith noted, these efforts could derail a housing recovery because:

– Federal support is keeping the housing market alive today.

– There’s no evidence that private money could fill the void if government-backed mortgages disappeared.

– Proposed “fair value” accounting rules would unnecessarily weaken FHA’s ability to stabilize the market and make homeownership possible for more Americans.

It’s unclear what time frame the GOP envisions for ending support for the housing market, or if they think any federal role in promoting homeownership is warranted. And this isn’t the first time that the GOP has proposed recklessly kicking the legs out from underneath Fannie and Freddie while they, like it or not, are keeping the housing market afloat.

But while the two mortgage giants can’t exist in their current form in the long run, removing all federal support from the housing market is simply unfeasible at the moment (and wouldn’t make for a good system going forward anyway). But the House Republicans, with their budget, are more intent on dismantling the social safety net than in actually promoting a recovery, so perhaps the fact that their housing plan would be a disaster shouldn’t come as much of a surprise.

President Obama today nominated Dartmouth University President Jim Yong Kim to be the next president of the World Bank, replacing the outgoing Robert Zoellick. Kim’s name was not among those featured most prominently in the speculation surrounding Obama’s choice, with former administration economic adviser Larry Summers, Secretary of State Hillary Clinton, former administration economist Laura Tyson, and Pepsi CEO Indra Nooyi leading the list. Here are the notable facts and figures about Kim’s life and career:

– He’s currently president of Dartmouth College, the first physician to hold that position and the first Asian-American to lead an Ivy League college.

– Kim co-founded the Partners in Health (PIH), a non-profit that focused on drug-resistant tuberculosis and helped drive down the cost of medication so that treatment could be widely available.

– He is also a former director of the Department of HIV/AIDS at the World Health Organization (WHO).

– Kim was born in Seoul, South Korea in 1959, but grew up in Muscatine, Iowa after his family moved when he was 5. He earned his M.D. from Harvard Medical Scool in 1991 and a doctorate in anthropology from Harvard University in 1993.

– He is critical of pharmaceutical patents, telling Financial Times in 2006, “The pharmaceutical companies are saying it would be better for countries to use their discounted price schemes. But we’re already hitting supply problems, while demand for the drugs is growing steadily.”

– He replicated Paul Farmer’s model of how to treat tuberculosis (TB) patients in Haiti. Through his research on how to most effectively treat patients with drug-resistant TB in developing nations, Kim trained hundreds of community health workers to deliver drugs to patients’ homes.

– His project achieved cure rates of more than 80 percent — better than many U.S. hospitals — and he pushed drug makers to produce the necessary antibiotics less expensively.

– He won a MacArthur “genius” fellowship in 2003.

– Kim, who has researched access to health care in poor nations, supports the Affordable Care Act and told Bloomberg in October 2011 that it does a good job of expanding access to health care in the U.S.

– In 2011, he launched the Center for Health Care Delivery Science at Dartmouth that mixed fields of study — management, economics, insurance, and medicine — to study the most effective ways to provide health care.

– And he showed Dartmouth students in 2011 that he can rap.

Kim, of course, is not the only nominee, though the World Bank has always been led by an American, and thus the American nominee has a significant leg up. Nigeria, South Africa and Angola have endorsed the nomination of Nigerian Finance Minister Ngozi Okonjo-Iweala. US economist Jeffrey Sachs has been nominated by Bhutan, East Timor, Haiti, Kenya, Guatemala and Chile.

Progressives have been pressuring Federal Housing Finance Agency director Edward DeMarco to allow government backed mortgage giants Fannie Mae and Freddie Mac to reduce mortgage principal for troubled homeowners. DeMarco, whose agency regulates Fannie and Freddie, has been resisting that push, claiming that providing aid to homeowners would be detrimental to Fannie and Freddie’s (and thus the taxpayer’s) bottom line.

DeMarco has been claiming that mortgage principal reductions would cost taxpayers $100 billion, but analysts last week threw cold water on that number, saying it comes from a flawed study. And today, ProPublica reports that an internal analysis from Fannie and Freddie found that aiding homeowners would save taxpayers money in the long run:

New analyses by mortgage giants Freddie Mac and Fannie Mae have added an explosive new dimension to one of the most politically charged debates about the housing crisis: Whether to reduce the amount of money beleaguered homeowners owe on their mortgages.

Their conclusion: Such loan forgiveness wouldn’t just help keep hundreds of thousands of families in their homes, it would also save Freddie and Fannie money. That, in turn, would help taxpayers, who bailed out the companies at a cost of more than $150 billion and are still on the hook for future losses. [...]

The companies now find that reducing principal on troubled mortgages has a “positive net present value” — in other words, that doing it would bring in more money for the companies over the life of the loans than not doing it.

The two companies’ analyses showed that upwards of a quarter million borrowers who owe more on their mortgages than their homes are worth could benefit from principal reductions. The companies would take a loss upfront, but over the long run these mortgage modifications would save the companies money because they would lead to lower default rates.

Many economists have said that Fannie and Freddie writing down mortgages would aid the economy and Department of Housing and Urban Development Secretary Shaun Donovan has tried to push the FHFA to allow the mortgage giants to take that step. Hopefully, this new analysis will lend some momentum to those saying that the most prudent thing the government can do to help Fannie and Freddie — and the wider economy — is keep people in their homes, rather than adding to the glut of vacant houses that haul down home prices for everyone in the neighborhood.