Nobel Prize winning economist Joseph Stiglitz writes: Today, inequality is growing dramatically again, and the past three decades or so have proved conclusively that one of the major culprits is trickle-down economics—the idea that the government can just step back and if the rich get richer and use their talents and resources to create jobs, everyone will benefit. It just doesn’t work; the historical data now prove that. He writes further and significantly: If those who are in charge of making the critical decisions are so “cognitively captured” by the 1 percent, by the bankers, that they see that the only alternative is to give those who caused the crisis hundreds of billions of dollars while leaving workers and homeowners in the lurch, the system is unfair. This approach also exacerbated one of the country’s most pressing problems: its growing inequality. Only with a vibrant middle class can the economy fully recover and grow faster. The more inequality, the slower the growth—a conclusion now endorsed even by the IMF. Because the less wealthy consume a greater share of their income than do the rich, they expand demand when they have more income. When demand is expanded, jobs are created: In this sense, it is ordinary Americans who are the real job creators. So inequality commands a high price: a weaker economy, marked by lower growth and more instability. It is not very complicated.
Posted on: Sun, 29 Jun 2014 18:36:42 +0000
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