Economic volatility matters because it tends to exacerbate social conflict. It seems intuitively obvious that periods of economic crisis create incentives for politically dominant groups to pass the burdens of adjustment onto others. With the growth of state intervention in economic life, the opportunities for such discriminatory redistribution clearly proliferated. What could be easier in a time of general hardship than to exclude a particular group from the system of public benefits?
That’s a quote from historian Niall Ferguson’s book The War of the Worlds. Published in 2007, that sounds almost prophetic as we deal with regressive budgets and spending cuts that affect the poor more than the rich.
The Earthbound Report 