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Joseph Stiglitz Explains the Price of Inequality

Wednesday, June 06, 2012

The top 1 percent of Americans control 40 percent of the nation’s wealth. Nobel Prize–winning economist Joseph Stiglitz explains the factors that have made America the most unequal advanced industrial country and argues that our inequality cripples growth, tramples on the rule of law, and undermines democracy. In The Price of Inequality: How Today's Divided Society Endangers Our Future Stiglitz examines our current state and its implications for democracy, monetary and budgetary policy, and globalization, and he includes a plan for a more fair and prosperous future for everyone.

Guests:

Joseph Stiglitz

Comments [21]

Bill

@jgarbuz from Queens "I do have a solution. Live within your means and learn to like it!"

That's not a solution, that's acceptance. "I have a bed bug problem! What's the solution?" "Why, to learn to live with them, of course!"

If not for the income redistribution of the last 30 years that's resulted in our current state of income inequality, people might actually have the means to be the consumers our economy needs them to be without incurring so much debt in the process. That's the problem. Ratifying a problem is no solution. Corporate America is sitting on tons of capital with nowhere to invest it because there's no demand for whatever goods or services their investments would provide. Romney keeps trumpeting entrepreneurs (which greater income equality would allow more people to be) while telling people to quit spending money. That's Borderline-Personality-Disorder Politics at work. At best, your "solution" condemns the economy to its current stagnant state.

Jun. 06 2012 03:47 PM
David

jgarbuz from Queens, you wrote: "get rid of national borders and let people flow anywhere to find better jobs, and that isn't going to happen either! "

I would add the word "unfortunately." You've hit on the problem. Whose fault is this problem? Governments. Both capital AND labor should be free to go where the opportunity is. But by trying to restrict capital instead of freeing labor, the problem will just be made worse.

But, I would also add, that you are correct because governments and the multinational corporations that control them will never allow open immigration globally. So labor markets, in one way or another, will always be screwed up.

Jun. 06 2012 03:15 PM
jgarbuz from Queens

Sorry in my previous post I meant to say a "lower" standard of living does not necessarily mean a WORSE standard of living. Just less excessive in our wasting of natural resources.

Jun. 06 2012 02:06 PM
jgarbuz from Queens

To Sheldon

I agree, that of course it is not a "zero sum" game. I don't mean that if the rest goes up, the West goes down except in excess. The one thing that really changes things is INNOVATION and new technologies, that may make energy relatively cheaper as well as cleaner, and create more automation, robots, unlock new synthetic resources, etc. I don't have to leave my little apartment anymore to see a movie. Netflix and the internet bring me scores of movies for almost free. I don't have to travel to see the world anymore as I would have had to a century ago. I can see it in documentaries, movies, etc.

What we can't do is waste increasing amounts of petroleum anymore, to travel in huge cars or live in huge homes requiring lots of heating and cooling. More of us will be living in apartments rather than on large plots of land. The suburbanization mania has reversed. Globalization is forcing out the excess. That is what I mean by a lower standard of living, but it is necessarily a WORSE standard of living.

Jun. 06 2012 02:04 PM
Sheldon from Brooklyn

Jg- your thesis on the relative immobility of labor is correct but you make the same mistake so-called liberals make by seeing Capitalism as a zero sum game, the rise in the standard of living in Asia does not have to necessarily result in lower living standards in the West but unfocused education policies and lack of investment in human capital will probably do so anyway.

Jun. 06 2012 01:53 PM
GW from Manhattan

jgarbuz is happy to be a house slave or a field slave. No the poor will not always be with us when the poor are educated and given opportunity and equal access. people like jgarbuz are the reason why the poor will always exist.. they have little faith in themselves and too much face in the masters they serve and worship

Jun. 06 2012 01:43 PM
GW from Manhattan

if the supply side was correct. Why did the Republican solution leave us in such a mess... repeatedly ! Ok let's continue down this path to a gradual decline and ruin that only our role as the world's reserve currency will slow down. Meanwhile, because I have an education I am hedging my bets applying for Canadian residency ( or Australian) and going for a career in an emerging industry that will benefit from much more efficient economies and "markets" outside of the USA..... the rest of you ... best of luck!

Jun. 06 2012 01:41 PM
jgarbuz from Queens

To Fuva

I do have a solution. Live within your means and learn to like it! The harsh laws of economics can be tinkered with, but not repealed. As Jesus said, "The poor will always be with us" and unfortunately, that includes me too. Times change, but people don't. On Solomon's ring was inscribed: "This Too Shall Pass." Good times pass, and bad times pass.

All these pundits paid for their punditry are not going to change anything, except maybe for the worse. Only thrift, hard work, good health, and good laws can lift a society up.

Jun. 06 2012 01:38 PM
Jackie

Sad reality - a nation of 300 million plus has enough work for about a quarter of that population. There simply isn't enough for everyone in this country to do, after everything has been outsourced. That is a tough pill to swallow. The usual way out of this is for a country to suppress its starving masses or start a war. We'll see.

Jun. 06 2012 01:37 PM
michael from manhattan

Let's face it: the Repubs have, after underfunding public education for decades, finally gotten exactly what they wanted: an ignorant, disengaged electorate that is easily duped into voting against their own self-interest -- if they vote at all. Brilliant. Evil, but brilliant.

Jun. 06 2012 01:34 PM
fuva from harlemworld

jgarbuz, you have no answers either. You continually resign yourself to low standards...But you're right, we need more discourse/ segments on solutions.

Jun. 06 2012 01:29 PM
chip

Stieglitz is incorrect. Tax revenues more than doubled in the years after the Reagan tax cuts. The supply siders were correct!

Jun. 06 2012 01:20 PM
fuva from harlemworld

Stiglitz' general thesis here has been reiterated time and time again on this program, B Lehrer, etc. And YET, the very basic concept is still lost on most citizens (and the entire BASE Republican base)...I welcome even more such segments. But what we really need are effective ways to socialize this and other pertinent SPETH info (social, political, economic, technical, health) amongst the general populace, so that the citizenry might make informed political decisions...

Jun. 06 2012 01:19 PM
jgarbuz from Queens

Stieglitz has no solutions. Like most liberals, he just gripes about income inequality between the owners of capital and the owners of their own labor. The only two solutions are, if income inequality is the most important factor, is either (a) we go back to restricting capital from flowing abroad, and that is not going to happen, or (b) get rid of national borders and let people flow anywhere to find better jobs, and that isn't going to happen either!

Raising taxes to a degree may help the deficit, but it alone is no solution. The standard of living in the West will retreat as the standard of living the Rest increases, because of the competition over resources.

Basically, most of us will have to learn to live with less and like it for the foreseeable future.

Jun. 06 2012 01:19 PM
tom from astoria

CORRECTION

Mr. Stiglitz mentions Walmart wealth. Isn't it central to our dilemma that hundreds of millions of jobs have been lost as companies make their profits by doing their manufacturing in China?

Jun. 06 2012 01:18 PM
RJ from prospect hts

Let's not forget that the robber barons who "contributed" by building the railway system, also murdered Chinese immigrant and other labor in the process, bought of politicians to steal land, and overall profited enormously by their "contributions." There could have been a better way, no?

Jun. 06 2012 01:16 PM
tom from astoria

Mr. Stiglitz mentions Walmart wealth.Isn't it central to our dilemma that hundreds of millions of American companies make their profits by doing their manufacturing in China?

Jun. 06 2012 01:16 PM
joe from nearby

Paper-pushing and rent-seeking create nothing....except easy money for the 1%.

Jun. 06 2012 01:13 PM
jgarbuz from Queens

The growing disparity in EVERY industrialized nation is growing due to one simple fact of globalization: Capital is mobile; Labor is immobile. Capital can flow anywhere in the world at the speed of light to take advantage of rising economies elsewhere, while Labor cannot move over borders so easily to take advantage of improving conditions elsewhere. For political reasons, we cannot have open borders to indiscriminate cross-border movements of labor, whereas capital has no ethnic, racial or religious objections to its flowing in. Capital is welcomed; foreign labor is not. That's why those who can only sell their labor cannot possibly compete with those who can move their excess capital around.

Jun. 06 2012 01:12 PM
Jenny from brooklyn

Question - is this old FDR explanation accurate? He said that a nation is like a poker game and it only works if everyone has money, so if one person has all the "chips" the game is over. So, would this mean that if the rich have too much wealth, it pulls our nations money out of circulation and slows the economy?

Jun. 06 2012 01:12 PM

If you listen to Mr. Stiglitz, an economist,today I have no doubt he will contradict a lot of what Greg David, a journalist, had to say on Brian Lehrer.

Jun. 06 2012 12:45 PM

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