The findings note that solutions – including robust social safety nets, an active redistribution of wealth and the protection of workers rights – “have been recommended for decades” and are well within the capacity of the world’s wealthy nations.

But in many countries, including the United States, such initiatives have been blocked by “economic elites” because they inevitably challenge the interests of certain individuals and groups, the report says, affecting the balance of power in nations that pursue greater economic redistribution.

The broad contours of income and wealth inequality in the United States are, at this point, well-known. The top 1% of households have roughly doubled their share of the nation’s wealth since 1980, leaving less behind for everyone else. The 400 richest Americans now have significantly more money than the 150 million Americans in the bottom 60% of the distribution.

In the past several decades, paychecks of rank-and-file workers have stagnated even as they have delivered on the growing profits demanded by their bosses and shareholders. As the U.N. report notes, the average compensation for a chief executive at a Standard & Poor’s 500 company was $14.5 million in 2018, while the average production and nonsupervisory worker took in about $40,000.

Defenders of the economic status quo have argued, at times, that inequality is probably not rising all that much. But even if it is, it may well be the inevitable byproduct of a capitalist society and, in fact, it might actually be good. Economic inequality, in this view, is simply the price of paying a fair remuneration to the people who produce the iPhones and the cool apps and the free shipping that all of us – even the less fortunate – are now able to enjoy.

The U.N. report notes, however, that rampant inequality is harmful even to people at the top of income and wealth distributions. Unequal societies “grow more slowly and are less successful at sustaining economic growth,” as numerous studies have shown. As economic conditions deteriorate in lower and middle classes, we may get to a point where a critical mass of the population can no longer afford the iPhones and cool apps and free shipping that are driving our economy, causing a recession. In the end, the trouble with capitalism may be that eventually you run out of other people’s money.

The U.N. report is unusually clear-eyed on the power dynamics underlying today’s inequality struggles. “People in positions of power tend to capture political processes, particularly in contexts of high and growing inequality,” the report states. “Efforts to reduce inequality will inevitably challenge the interests of certain individuals and groups. At their core, they affect the balance of power.”

This observation is extremely useful for understanding the current debate. The winners of the modern, winner-take-all economy often protest that the distribution of money is not a zero-sum game. The rank-and-file may be getting a smaller piece of the American pie, but if that pie is much bigger than it used to be, they may still be better off than they were 40 years ago.

But while preaching nonzero sum thinking, those winners have also taken a ruthlessly zero-sum approach to rewriting the rules of the economy to their own benefit. Corporations and their wealthy leaders have lobbied extensively, and successfully, to reduce their tax burdens, weaken the social safety net, undermine the power of their workers and increase their influence in the policymaking process. The net result has been a massive transfer of wealth and power from the poor and middle class to those at the top.

When the rich shape a country’s institutions in their own image and to their own benefit, it’s little wonder that trust in those institutions declines, as it has in the United States. That lack of trust creates a vacuum for authoritarian and nativist regimes to take root, according to the United Nations. “The central message of populist movements has historically been that the common people are being exploited by a privileged elite, and that radical institutional change is required to avoid such exploitation,” according to the report.

But research shows the history of populist regimes since 1990 has primarily been one of corruption, self-dealing, worsening inequality and political violence.

Policymakers have known how to avoid this dire outcome for decades, according to the U.N. report. Leveling the playing field would involve strengthening the minimum wage, reinforcing the social safety net and ensuring universal access to health care in places that currently lack it. It’s really that simple, and wealthy countries like the United States have plenty of economic capacity and technical know-how to pull it off.

But putting those policies in place would require redistributing a lot of wealth downward, via a mechanism like a wealth tax or some other form of increased taxation on the wealthy. And the individuals and institutions currently hoarding the country’s riches have rightly identified those policies as a threat to their interests.

The S&P 500 Index faded from session highs after the FTC news, with Facebook and Microsoft among the decliners. Health-care and consumer-discretionary shares led the day’s advancers. The Dow Jones Industrial Average and Nasdaq 100 were little changed. Ten-year Treasury yields rose, while the dollar dropped for the first time in five sessions.

Investors have been more bullish lately despite the coronavirus outbreak, signaling some confidence that central banks could ease policy if growth slows. In remarks to Congress on Tuesday, Federal Reserve Chairman Jerome Powell, while positive about the American economic outlook, said the central bank is keeping a close eye on fallout from the epidemic, which continues to disrupt travel and trade.

“With fundamentals strong, a robust employment situation and inflation on track, Powell’s cautiously optimistic stance isn’t too surprising, especially since coronavirus fears and trade tensions are at bay,” said Mike Loewengart, vice president of investment strategy at E-Trade Financial. “What remains to be seen is the lasting effect of the coronavirus on global growth, which is already tepid.”

Oil bounced back from Monday’s swoon and gold fell. Bitcoin surged back above $10,000. European and Asian equity benchmarks closed higher.

– – –

Here are some key events coming up:

– Earnings season continues with reports including MGM Resorts International and Softbank on Wednesday; Thursday will bring Alibaba, Nissan, Credit Suisse, Airbus, Nestle and AIG.

– A key contest for Democratic presidential hopefuls unfolds Tuesday, when New Hampshire holds a primary vote.

– Thursday sees a gauge of underlying U.S. inflation, the core consumer price index. It is forecast to increase to 0.2% in January, a faster pace than in December.

– China and the U.S. on Friday lower tariffs on billions of dollars of respective imports as part of the trade deal signed last month.

– – –

These are the main movers in markets:

Stocks

– The S&P 500 Index increased 0.2%, to 3,357.77, as of 4:02 p.m. New York time, the highest on record.

– The Stoxx Europe 600 Index advanced 0.9%, to 428.48, the highest on record.

– The MSCI Asia Pacific Index rose, 0.6%, to 169.93.

– The MSCI Emerging Market Index climbed 1.1%, to 1,098.98.

Currencies

– The Bloomberg Dollar Spot Index declined 0.2%, to 1,205.58, the first retreat in a week and the largest drop in more than a week.

– The British pound rose 0.3%, to $1.2956, the biggest rise in more than a week.

– The euro rose 0.1%, to $1.0919, the first advance in more than a week.

– The Japanese yen was little changed at 109.79 per dollar.

Bonds

– The yield on 10-year Treasuries advanced two basis points, to 1.59%.

– Germany’s 10-year yield rose two basis points, to -0.39%.

– Britain’s 10-year yield increased one basis point, to 0.569%.

Commodities

– West Texas Intermediate crude advanced 0.9%, to $50 a barrel.

– Gold weakened 0.2%, to $1,568.25 an ounce, the first retreat in a week.

– LME copper increased 0.1%, to $5,667 per metric ton.

Now, fresh signs of robot supremacy are emerging on Wall Street in the form of machine stock analysts that make more profitable investment choices than humans. At least, that’s the upshot of one of the first studies of the subject, whose preliminary results were released in January.

Buy recommendations peddled by robo-analysts, which supposedly mimic what traditional equity research departments do but faster and at lower costs, outperform their flesh-and-blood counterparts over the long run, according to Indiana University professors.

“Using this type of technology to make investment recommendations or to conduct investment analyses is going to become increasingly important,” Kenneth Merkley, an associate professor of accounting and one of the authors, said by phone.

Whether getting stock calls right is a critical mission of human analysts is debatable. Wall Street research departments serve a variety of functions, among them connecting investors with company executives and gathering earnings and other corporate data. While their buy, sell and hold recommendations still garner attention and can move stocks, the number of clients premising investment decisions off them is probably limited.

The study looked at a small and still largely experimental branch of fintech, firms founded on the premise that digital technology does a better job than humans in making equity recommendations. While all analysts use computers, a handful of start-ups has been seeing if programs can handle every aspect of the stock-picking process.

One firm whose data was in the study, New Constructs, uses robo-analysts to collate everything from income statements and balance sheets to the footnotes at the bottom of reports to push out picks, according to its chief executive officer, David Trainer.

“We’re not doing sentiment, we’re not doing momentum, we’re not doing what I would call all these sexy, short-term metrics,” Trainer said in a phone interview. “We can give them good, old-fashioned analytical rigor to insert in their process at little to no cost.”

Trainer’s clients — quant funds, consulting firms, IRAs and asset managers, among others — can buy access to the services for anywhere from about $10 to $15,000, he said, depending on the type of research.

The Indiana University study analyzed more than 76,000 reports issued by seven different robo-analyst firms between 2003 and 2018. Among the findings were that automated services are more likely to produce sell ratings (as opposed to holds and buys) than traditional firms. They also revise their reports more frequently and may be better at accounting for large and complex corporate disclosures, including filings with the Securities and Exchange Commission.

The authors compared the robo-analyst recommendations to those of traditional analysts part of the Institutional Brokers’ Estimate System. They omitted holds in their long-term analysis as those recommendations are less actionable, according to Merkley.

Because robo-analysts don’t exhibit any biases and aren’t subject to conflicts of interest, they produce a more balanced distribution of ratings, the authors, who also included Braiden Coleman and Joseph Pacelli, claimed. Whereas traditional analysts actively work on maintaining relationships with company management, robots aren’t beholden to the same conventions. Their calls may not get the same pop as humans’ at first, but the recommendations can generate “substantial returns for individual investors,” they said.

Besides New Constructs, the researchers analyzed recommendations from firms including Minkabu, Rapid Ratings and TheStreet.com that overlapped with those of traditional analysts.

Out of the total pool of outstanding robo-analyst recommendations, more than 30% represented buy ratings compared with 47% from traditional analysts (the overall number of outstanding recommendations from traditional analysts was five times the robots’). About a quarter of recommendations from the machines fell into the sell category, compared with 6% from humans.

Traditional analysts have been under pressure recently — machines have been doing a bigger share of the work while investors increasingly pile into passive funds. In the next decade, automation could reduce headcount on Wall Street and the banking industry by about 200,000, according to Wells Fargo Securities.

“What we’re seeing is that research budgets at these banks are being constrained, the value proposition of sell-side equity research is being reconsidered — for us, this industry is ripe for disruption,” said Merkley. “Technology is one of those disruptions because you can do things probably at lower cost and greater scale.”

Robo-analysts differ from their better-known counterparts, robo-advisers — shops like Betterment that use algorithms to provide automated financial planning services. But whatever their form, skepticism abounds on Wall Street. Opponents argue that machines are unable to parse nuanced discussions on earnings calls or have conversations with company management. New Constructs’ Trainer says the opposite is true — robots can analyze huge amounts of data, including transcripts of conversations, at much faster paces.

But, “as long as there’s still people that need human interaction, that need to talk to management and talk about the industry and perform that function for the buy-side, the sell-side will still be around,” said Merkley.

“Putting the federal budget on a sustainable path when the economy is strong would help ensure that policymakers have the space to use fiscal policy to assist in stabilizing the economy during a downturn,” Powell said in testimony to the House Financial Services Committee.

In past recessions, the Fed has played a large role in reviving the economy by sharply cutting interest rates. But Powell has been warning lawmakers that the central bank won’t have much ammunition left to fight the next downturn because interest rates are so low (the benchmark rate is just below 1.75 percent, far below rates above 5 percent in the past).

More government spending is likely to be needed to aid the economy in the next recession.

The Fed chair’s warning comes as the U.S. federal debt has grown by about $3 trillion since President Donald Trump took office, and the president’s latest budget proposal submitted this week would add another $5 trillion to the debt over the coming decade. Economists worry that so much U.S. government debt can dampen private investment by driving investors to buy public bonds instead of private ones.

“A more sustainable federal budget could also support the economy’s growth over the long term,” said Powell, who spent time before he joined the Fed educating Congress about the debt limit as a Bipartisan Policy Center scholar.

Trump blasted Powell, tweeting in the middle of the congressional hearing that the Fed chair was keeping interest rates too high.

“When Jerome Powell started his testimony today, the Dow was up 125, & heading higher. As he spoke it drifted steadily downward, as usual, and is now at -15. Germany & other countries get paid to borrow money. We are more prime, but Fed Rate is too high, Dollar tough on exports,” Trump wrote on Twitter.

The United States has never had a negative interest rate. When asked about that possibility on Tuesday, Powell said that’s “not a tool we are looking at.” Economists widely view negative interest rates as only worth doing when the economy is in a terrible situation. Trump keeps calling for lower interest rates to further boost growth and the stock market.

For now, the Fed chair does not see any signs of a recession on the horizon. He told Congress that the U.S. economy is in a “very good place” and has remained “resilient” to numerous punches in recent months. He expects growth to remain solid, although he said the coronavirus is a major unknown for the economy.

“We know that there will be some – very likely – be some effects on the United States” from the coronavirus, Powell said, but he was hesitant to predict how big of an impact it will have on the economy.

“I think it’s too early to say. We have to resist the temptation to speculate on this,” Powell said. He reiterated that the Fed is “closely monitoring” the situation for possible “disruptions in China that spill over to the rest of the global economy.”

Powell stressed to Congress that his concerns for the economy are more long term. In addition to reducing the deficit, he once again said there is a great need to invest in programs to get more people back to work and to boost productivity.

“Finding ways to boost labor force participation and productivity growth would benefit Americans and should remain a national priority,” Powell said.

The share of working-age Americans who are in the labor force is at its highest rate in more than a decade, according to a Labor Department report Friday, but it remains well below most of the nation’s competitors.

Powell’s fairly positive assessment of the U.S. economy was echoed by other Fed leaders this week.

“Policy is in a good place. The economy is in a good place,” San Francisco Fed President Mary Daly said in a speech Monday in Ireland.

Daly was also careful to lower concerns about the effect of the coronavirus on the U.S. economy so far.

“For now I’m watching the coronavirus carefully to see if it has any longer-term effects on the economy or deeper effects than we’ve penciled in right now,” Daly said. “But to date, none of those have materialized.”

Philadelphia Fed President Patrick Harker said Monday that the negative effects on China were “something to watch.”

The U.S. economy is heavily driven by consumer spending, which remains healthy. Other economies are more dependent on trade, which is starting to be affected by the shutdown of many factories in China.

Total U.S. household debt rose by $601 billion in the fourth quarter, or 1.4%, surpassing $14 trillion for the first time, the New York Fed’s quarterly household credit and debt report showed. That’s $1.5 trillion above the previous peak in the third quarter of 2008. Overall household debt is now 26.8% above the second-quarter 2013 trough.

Mortgage borrowing rose by $120 billion to $9.56 trillion. The rate for a 30-year mortgage has fallen by about 100 basis points over the past year, adding to home purchasers’ buying power. For example, a $500,000, 30-year loan costs about $300 less per month.

“Mortgage originations, including refinances, increased significantly in the final quarter of 2019,” Wilbert Van Der Klaauw, vice president at the New York Fed, said in a statement.

Mortgage loans for young adults age 18 to 29 rose to a the highest level since the third quarter of 2007. Originations for 30-year-olds rose to $210.1 billion last quarter — the highest level since the end of 2005.

Total debt for people ages 18 to 29 rose to a record $1.04 trillion.

Student debt increased to $1.51 trillion from $1.46 trillion at the end of 2018. More than $100 billion in student debt is held by those age 60 and over. Auto loans rose to $1.33 trillion, while credit card debt rose to a record $930 billion.

Auto debt, which has risen for 35 consecutive quarters, increased $16 billion from the previous quarter. Almost 5% of auto loans are 90 days of more delinquent. This is the highest percentage since the third quarter of 2011.

Credit card delinquencies rose to 8.36% an 18-month high.

Among student debt, one in nine borrowers were 90+ days delinquent or in default in 2019, and this figure may be understated. About half of student loans are currently in deferment, in grace periods or in forbearance and therefore temporarily not in the repayment cycle. Once these loans enter that cycle, delinquency rates are projected to be roughly twice as high, according to the Fed report.