Professor Joseph Stiglitz

  • May 4, 2012

    by Jeremy Leaming

    Slowly the economy continues to recover, with jobs being added over the past 26 months, but that progress is amazing in an atmosphere where one of the two major political parties is concerned only with advancing the outlandish interests of the nation’s super wealthy.

    The Great Recession, underway before the Obama administration was in existence, has shoved millions into poverty and the gap between the nation’s top 1 percent and everyone else is the widest since the 1920s. Last fall, the Census Bureau reported that the number of people in poverty is at its highest in more than 50 years. As noted earlier this week the super wealthy are increasingly out-of-touch, indeed one retired multimillionaire is pushing a book that calls for more economic inequality.

    But how did the country arrive at this point where the middle class is shrinking, the poor is growing and a tiny group of people are amassing most of the wealth? Because, according to some, the nation’s conservative party has been bought by the out-of-touch super wealthy.

    The mainstream media, in the name of objectivity, will continue to blame both parties for gridlock in Washington, but a growing number of economists, academics, lawyers, activists, and others concerned about the well-being of all people are pushing back against that tired line.

    Thomas E. Mann and Norman J. Ornstein, who have studied Congress for several decades, say the Republican Party is to blame for pushing fantastical policy and refusing to budge from it, therefore creating an atmosphere where progress or change is difficult to foster.

    “The GOP has become an insurgent outlier in American politics, Mann and Ornstein write for The Washington Post. “It is ideologically extreme; scornful of compromise; unmoved by conventional understanding of facts, evidence and science; and dismissive of the legitimacy of its political opposition.”

    One of the group’s to blame for the Republican Party’s unmovable concern about the nation’s super wealthy is Grover Norquist’s Americans for Tax Reform, which pushes conservative lawmakers to sign a pledge against raising any taxes. Norquist (pictured) is all about policy that starves the federal government of revenues, so policies to help the less fortunate dwindle, because those are not the people Norquist or the Republican Party are concerned with.

    In his May 4 column for The New York Times, economist Paul Krugman notes the work of Mann and Ornstein, writing, “Specifically money buys power, and the increasing wealth of a tiny minority has effectively bought the allegiance of one of our two major political parties, in the process destroying any prospect for cooperation.”

    “And the takeover of half our political spectrum by the 0.01 percent is, I’d argue, also responsible for the degradation of our economic discourse, which has made any sensible discussion of what we should doing impossible,” Krugman continued.

    In a piece last year for Rolling Stone Tim Dickinson, said the party of Ronald Reagan has “undergone a radical transformation, reorganizing itself around a grotesque proposition: that the wealthy should grow wealthier still, whatever the consequences for the rest of us.”

  • February 29, 2012

    by Jeremy Leaming

    According to at least some polling the Tea Party infused meme that the landmark health care reform law is constitutionally flawed because the law’s minimum coverage provision is a wild overreach of congressional power has had some success. But pollsters, thankfully, won’t determine whether the law stands or falls.

    The Supreme Court, which hears oral argument in the states’ challenge to the Affordable Care Act in late March, of course will have the ultimate say in his matter. And according to an array of constitutional law experts it’s a matter that shouldn’t be a difficult call.

    In a piece for the Federalist Society’s Harvard Journal of Law and Public Policy, UNC law professor and constitutional law expert William P. Marshall details why the ACA fits within the nation’s “constitutional culture,” as defined by the late Chief Justice William Rehnquist. (In Planned Parenthood v. Casey, Marshall writes, that for Rehnquist “constitutional culture is akin to the beliefs about constitutional meaning that are embedded in what he calls the ‘national psyche.’”)

    Opponents of the health care law say it goes against the nation’s commitment to “rugged individualism,” and against some conservatives' distrust of a strong central government.

    “But the individualist claim,” Marshall (pictured) writes, “runs up against a number of harsh realities that diminish its force." For starters, societal changes since the 1930s have worked to undermine the notion of a society held together by rugged individualists.

    Marshall, a former ACS Board member, notes, “The entry costs needed to succeed in this economy, for example, are far greater because of the shifts in the types of jobs that are available and because of the greater expectations placed on those joining the workforce. One reason for this is education. Succeeding in the current economy requires sophisticated training that cannot be mastered by the individual acting alone.”

  • January 24, 2012

    by Jeremy Leaming

    It may be hokum to some conservative pundits, but government policies that coddle the nation’s super wealthy, have sparked what some economists say are long overdue and legitimate protests, such as the Occupy Wall Street demonstrations.

    In his Jan. 24 column for The New York Times, David Brooks blasts lawmakers for taking up the concerns of the OWS protestors, writing that they are obsessed with “pounding down the rich.” But Brooks seems to have missed what is animating those protests – the fact that conservative economic policies in the United States have been aimed heavily in favor of protecting a powerful few.

    Columbia University professor Joseph E. Stiglitz has written about this nation’s growing wealth gap, while acknowledging that the top 1 percent has contributed to society. Nonetheless, Stiglitz notes the policies protecting the top 1 percent are shrinking middle classes in numerous countries, and creating disconcerting gaps, between the top 1 percent and everyone else.

    “But, around the world, political influence and anti-competitive practices (often sustained through politics) have been central to the increase in economic inequality. And tax systems in which a billionaire like Warren Buffet pays lower taxes (as a percentage of his income) than his secretary, or in which speculators, who helped bring down the global economy, are taxed at lower rates than those who work for their income, have reinforced the trend,” Stiglitz wrote in a piece republished by Slate.

    Stiglitz goes on to note that many of the bankers who helped trigger the Great Recession, and were later bailed out by taxpayers, are “now back at their desks, earning bonuses that amount to more than most workers hope to earn in a lifetime, while young people who studied hard and played by the rules see no prospects for fulfilling employment.” (In a recent piece for The Times, Susanne Craig reports that large bonuses have already returned for top executives of two Wall Street titans. For example, Craig notes that despite a “rough year,” JPMorgan’s chief executive, Jamie Dimon, “was awarded $17 million in equity-linked stock for his work in 2011, according to a regulatory filing.”)

    Stiglitz says the “rise of inequality is the product of a vicious spiral: The rich rent-seekers use their wealth to shape legislation in order to protect and increase their wealth – and their influence. The U.S. Supreme Court, in its notorious Citizens Uniteddecision, has given corporations free rein to use their money to influence politics. But while the wealthy can use their money to amplify their views, back on the street, police wouldn’t allow me to address OWS protesters through a megaphone. The contrast between overregulated democracy and unregulated bankers did not go unnoticed. But the protestors are ingenious: They echoed what I said through the crowd, so all could hear.”

    Some lawmakers, despite conservative pundits’ derision of the OWS protesters, are listening.

    In his Dec. 6 address in Osawatomie, Kan., President Obama cited the statistics, widely reported by Stiglitiz and others, saying “the average income of the top 1 percent has gone up by more than 250 percent to $1.2 million per year. I’m not talking about millionaires, people who have a million dollars. I’m saying people who make a million dollars every single year. For the top one hundredth of 1 percent, the average income is now $27 million per year. The typical CEO who used to earn about 30 times more than his or her worker now earns 110 times more. And yet, over the last decades the incomes of most Americans have actually fallen by about 6 percent.”

  • December 7, 2011

    by Jeremy Leaming

    Some national lawmakers, including the president, are ratcheting up their rhetoric challenging economic policies based largely on advancing tax breaks for the wealthiest and deregulation as the only methods to expanding economic opportunities for most Americans.  

    As noted by TPM’s Brian Beutler, Sen. Patty Murray, former co-chair of the so-called Super Committee, in prepared floor remarks, directly takes on the conservative’s mantra that lower taxes for the richest Americans means more jobs for everyone else.

    Murray’s statement, in part, reads:

    Republicans seem to be operating under the backwards economic principle that only tax cuts for the richest Americans and biggest corporations are worth fighting for. In fact, they have a name for this group of people: they call them ‘job creators.’ They believe the only ones who create jobs in America are the rich – and they claim that the tax cuts and loopholes they fight for that benefit the wealthy will somehow trickle down to ordinary families. Mr. President – we know this is wrong. We know this Republican economic policy has failed us. It was this kind of thinking that turned a surplus into a deficit, that brought the economy to its knees, that failed the middle class – and that allowed the wealthiest Americans to amass record fortunes paying the lowest tax rates in decades.

    A growing chorus of economists has recognized that right-wing economic policies have greatly exacerbated a wealth gap, one that has helped, in part, to galvanize Occupy Wall Street protests. Columbia University Business School Professor Joseph E. Stiglitz wrote earlier this year for Vanity Fair, “While the top 1 percent have seen their incomes rise 18 percent over the past decade, those in the middle have actually seen their incomes fall. All the growth in recent decades – and more – has gone to those at the top.” In the same article, Stiglitz said the nation’s top 1 percent exert great influence on the government to keep right-wing economic policies in place. In a recent piece for Rolling Stone, Tim Dickinson wrote, “Since Republicans rededicated themselves to slashing taxes for the wealthy in 1997, the average annual income of the 400 richest Americans has more than tripled, to $345 million –while there share of the tax burden has plunged by 40 percent.”

  • November 16, 2011

    by Jeremy Leaming

    As if more evidence is needed on the effects of growing economic inequality, a new study by Stanford University reveals, perhaps not surprisingly, that the wealthiest Americans are walling themselves off from everyone else, and poorer neighborhoods are burgeoning. As The Huffington Post reports, the Stanford study also provides yet another “sign of a deteriorating middle class.”

    “From 2000 to 2007, family income segregation grew significantly in almost all metropolitan areas (in 89 percent of the large and moderate sized metropolitan areas). This extends a trend over the period of 1970 – 2000 during which income segregation grew dramatically,” a summary of the report states.

    Regarding the proliferation of wealthy enclaves, the report explains that “high-income families are much less likely to live in neighborhoods with middle- and low-income families than low-income families are to live in neighborhoods with middle- and high-income families.” Additionally, the report found that “Income segregation among black and Hispanic families increased much more than did income segregation among white families from 1970 to 2007.”

    As noted by The Huffington Post, Sean F. Reardon, one of the report’s authors, told The New York Times that the segregation of the super wealthy essentially makes it easier for them to lose touch with the plight of everyone. Some leading economists have argued that the few Americans raking in the largest sums of money appreciate a federal government that can only seem to agree on policies that continue to protect their gilded lifestyles. Indeed Columbia University Business School Professor Joseph Stiglitz has written forcefully about the nation’s 1 percent, and its desire to maintain conservative economic policies.