General Discussion
Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsJoseph Stiglitz- Inequality Is Holding Back The Recovery
The re-election of President Obama was like a Rorschach test, subject to many interpretations. In this election, each side debated issues that deeply worry me: the long malaise into which the economy seems to be settling, and the growing divide between the 1 percent and the rest an inequality not only of outcomes but also of opportunity. To me, these problems are two sides of the same coin: with inequality at its highest level since before the Depression, a robust recovery will be difficult in the short term, and the American dream a good life in exchange for hard work is slowly dying.
Politicians typically talk about rising inequality and the sluggish recovery as separate phenomena, when they are in fact intertwined. Inequality stifles, restrains and holds back our growth. When even the free-market-oriented magazine The Economist argues as it did in a special feature in October that the magnitude and nature of the countrys inequality represent a serious threat to America, we should know that something has gone horribly wrong. And yet, after four decades of widening inequality and the greatest economic downturn since the Depression, we havent done anything about it.
There are four major reasons inequality is squelching our recovery. The most immediate is that our middle class is too weak to support the consumer spending that has historically driven our economic growth. While the top 1 percent of income earners took home 93 percent of the growth in incomes in 2010, the households in the middle who are most likely to spend their incomes rather than save them and who are, in a sense, the true job creators have lower household incomes, adjusted for inflation, than they did in 1996. The growth in the decade before the crisis was unsustainable it was reliant on the bottom 80 percent consuming about 110 percent of their income.
Second, the hollowing out of the middle class since the 1970s, a phenomenon interrupted only briefly in the 1990s, means that they are unable to invest in their future, by educating themselves and their children and by starting or improving businesses.
more (excellent read)
http://opinionator.blogs.nytimes.com/2013/01/19/inequality-is-holding-back-the-recovery/
Agony
(2,605 posts)"""
Market forces dont exist in a vacuum we shape them. Other countries, like fast-growing Brazil, have shaped them in ways that have lowered inequality while creating more opportunity and higher growth. Countries far poorer than ours have decided that all young people should have access to food, education and health care so they can fulfill their aspirations.
Our legal framework and the way we enforce it has provided more scope here for abuses by the financial sector; for perverse compensation for chief executives; for monopolies ability to take unjust advantage of their concentrated power.
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As Mr. Obamas second term begins, we must all face the fact that our country cannot quickly, meaningfully recover without policies that directly address inequality. Whats needed is a comprehensive response that should include, at least, significant investments in education, a more progressive tax system and a tax on financial speculation.
The good news is that our thinking has been reframed: it used to be that we asked how much growth we would be willing to sacrifice for a little more equality and opportunity. Now we realize that we are paying a high price for our inequality and that alleviating it and promoting growth are intertwined, complementary goals. It will be up to all of us our leaders included to muster the courage and foresight to finally treat this beleaguering malady.
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neo-liberals and neo-conservatives both need to be put in their place.
hay rick
(7,521 posts)The sidelines.
Stiglitz is one of the good guys.
nashville_brook
(20,958 posts)also shared on FB.
Egalitarian Thug
(12,448 posts)He and Krugman and a host of other economists with a track record of being right have all been actively ignored while we are held hostage to a political commitment to doing the same things over and over.
ProSense
(116,464 posts)"He and Krugman and a host of other economists with a track record of being right have all been actively ignored while we are held hostage to a political commitment to doing the same things over and over. "
...you were dissing Krugman here: http://www.democraticunderground.com/?com=view_post&forum=1002&pid=2226642
Here's Krugman on the Stiglitz piece:
Joe Stiglitz has an Opinionator piece arguing that inequality is a big factor in our slow recovery. Joe is an insanely great economist, so everything he says should be taken seriously. And given my political views and general concerns about inequality, Id like to agree.
But you knew there was a but coming Ive thought about these issues a lot, and havent been able to persuade myself that this particular morality tale is right.
Its worth noting that two of Joes four points arent really about the current recovery. He argues that high inequality is causing huge waste of human talent, because the poor and increasingly the middle class lack access to good education; and I agree. He also argues that inequality fosters financial crisis, and I agree with that too.
But were talking about the financial crisis aftermath, not the crisis itself. What role does inequality play?
- more -
http://krugman.blogs.nytimes.com/2013/01/20/inequality-and-recovery/
Egalitarian Thug
(12,448 posts)and still be in support of the person or idea they disagree with. In the other thread you refer to, I merely point out that wealth has, IMO, created something of a blind spot in one aspect of Dr. Krugman's opinion piece. That doesn't make me a "Krugman hater", except to the Presidential cultists.
I think either Drs. Krugman or Stiglitz would have been incalculably better advisers than the Wall Street welfare queens the President did pick to fill those positions, and that the whole nation would be in far better shape today if he had.