Stiglitz: Some Are More Unequal Than Others

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Some Are More Unequal Than Others

By JOSEPH E. STIGLITZ

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We’d all do well to pay a bit closer attention. That American inequality is at historic highs is undisputed. It’s not just that the top 1 percent takes in about a fifth of the income, and controls more than a third of the wealth. America also has become the country (among the advanced industrial countries) with the least equality of opportunity. Meanwhile, those in the middle are faring badly, in every dimension, in security, in income, and in wealth — the wealth of the typical household is back to where it was in the 1990s. While the recession has made all of this worse, even before the recession they weren’t faring well: in 2007, the income of the typical family was lower than it was at the end of the last century. While Obama may not have done as much as he should to counteract the steep downturn he inherited from George W. Bush upon taking office — and he underestimated the depth of the problems that had been passed along to him — he did far more than his predecessor. And he could have done far more, as the dimensions of the problem became clearer to everyone, had he not faced such strong opposition in Congress.

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The Romney campaign, however, has defended inequality or brushed it aside. To do so, it has employed a handful of economic myths. Here are a few of the most important:

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As I have explained in detail elsewhere, the cost of these myths goes far beyond the damage to our economy, now and in the future. The fabric of our society and democracy is suffering. The worry is that those at the top are investing their money not in real investments, in real innovations, but in political investments. Their big contributions to the presidential and Congressional campaigns are, too often, not charitable contributions...Such political investments undermine and corrupt our democracy...the increasing influence of money, especially notable in this election, the outcomes of our political process are becoming more like one dollar, one vote than one person, one vote. It’s even worse, because political inequality leads to economic inequality, which leads in turn to more political inequality...Recognizing all this is not class warfare. It is simply acknowledging the realities of life in the United States, which Romney has not done. That should be cause for concern: if you don’t recognize that there is a problem, and if you don’t understand the sources and consequences, you will never work to solve it.

Obama has at least touched on key elements: his education policies, from “the race to the top” to the reforms of student loan programs, will enhance opportunity. His tax proposals will do a little bit about the extremes at the top. His jobs and investment programs will expand growth now, and in the future, and these will be of enormous benefit to those in the middle. Romney and Ryan have tried a hard tack to the center in their rhetoric in recent weeks. But let no one be deceived: their tax policies will lead to even more inequality at the top, the continued hollowing out of the middle, and more poverty at the bottom. Worst of all, they will lead to a more divided society that endangers our future — our economy, our democracy and our sense of identity as a nation.

http://campaignstops.blogs.nytimes.com/2012/10/26/stiglitz-some-are-more-unequal-than-others/

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