Joseph Stiglitz: Myth Buster

In a recent essay, Nobel Prize winning economist Joseph Stiglitz considered “The Myth of America’s Golden Age” and the measures taken by government in 2008 and after to avert another Depression.

The entire piece is well worth reading, but the following paragraph struck me as a perceptive–and straightforward–explanation of this country’s growing inequality.

If our politics leads to preferential taxation of those who earn income from capital; to an education system in which the children of the rich have access to the best schools, but the children of the poor go to mediocre ones; to exclusive access by the wealthy to talented tax lawyers and offshore banking centers to avoid paying a fair share of taxes—then it is not surprising that there will be a high level of inequality and a low level of opportunity. And that these conditions will grow even worse…

When I was a new lawyer, the partner I was assigned to told me something I’ve always remembered: there is only one legal question, and it is “what should we do?”

What’s true for the practice of law is equally true for the crafting of public policies. If Stiglitz is correct–and he clearly is–what should we do?

And in a system that has been profoundly corrupted by money, a system where even well-meaning lawmakers are beholden to rabid base voters whose fears have been expertly manipulated by the oligarchs, how do we do it?


  1. I think 2 things need to be done:
    1. Work to get $$$ out of politics (there are a variety of ideas floating around)
    2. Term limits for all branches of government. If a term limit was deemed applicable to the Presidency (2) then it should apply to the Congress and the SCOTUS.

  2. I suppose it’s too late to include socialism in the civic literacy curriculum. Even though it provides the essential infrastructure of our capitalist system, democratic socialism has been bent by the right wing to become synonymous with Robin Hood. As Stiglitz has said, “The only true and sustainable prosperity is shared prosperity.” Remember when school report cards used to give a score for “plays well with others”? We used to teach how to share, and by practicing it we learned how valuable sharing can be for everyone concerned.

  3. I just read Joseph Stiglitz commentary. I grew up in the ” Da Region” (an area from just east of Gary arcing along the Lake into South Suburbs of Chicago) on the Illinois side. The Golden Age from post WW 2 to the late 1970’s was indeed as he puts it an economic “aberration.” Like Stiglitz I was a baby boomer.

    Consider the World at that time post WW 2: The Major Axis Powers had their industrial base destroyed by bombing. The European theater had the destruction of battlefields from the Volga in the East to Normandy in the West. The US Army Air Force was running out of targets in Japan (cities) when the War ended.

    Post WW 2 – All the consumer goods that were in demand were made in the USA. We enter the Era of “Free Trade” and NAFTA and our Industrial base disappears. The Steel Mill I once worked in no longer exists, it a huge vacant space.

    The driving force has been Profit. If you cannot outsource the product to the Third World, bring the Third World here. Anything that impedes profit – clean air, clean water regulations, and Unions must be by definition an evil to be fought by the 1%. The Big Box stores outsource their production and their conscience – Atlas Shrugs and a factory falls down or burns killing scores or even hundreds of workers in the Third World.

    I attended the Occupy Demonstration here in Indy a few years ago. I thought a force like this had not been seen since the Civil Rights and Anti-War movements of the 1960’s and 1970’s. The Democrats who should have welcomed this movement if they were truly committed to the Working Class, the 99% remained silent. The Occupy demonstrators were rounded up and arrested for disturbing the peace. The Elite of Wall Street whose reckless conduct brought about this economic calamity walk away – Too Big to Fail to Big to Jail.

  4. This subject was breached by Jim Hightower on the Bill Moyers show last evening. One could easily discern that Mr. Hightower, a highly respected journalist, was torn to reply to the question of the manner in which things can be changed. He cited the blood spilled during the French Revolution, the American Revolution, Russian Revolution and on and on. The haves will not give an inch and will spend billions on wars which can never accomplish what thousands would in peace. That is the nature of power, pure and simple. To a hammer, everything else is a nail. You cannot plead for equality, you cannot march for it. You cannot vote for it. The goalposts will move a mile each time you gain a foot. Your only hope is that their dogs will refuse to bite and their guns will not fire. That is not likely to happen. Today you read that your local sheriff has been given a MRAP to add to his arsenal of surplus high-tech killing machinery. You have damaged war torn vets who are now expert damaged cops. To a gun, everything is a target and to a dog, everything is a bone. Therefore you dog lovers must be prepared to shoot dogs or to bring badder dogs. You must be prepared to die ten for one, a hundred for one as in Vietnam, Korea, Iraq, Iran, etc, to achieve equality. You must insure that a nation intolerable for some, must be intolerable for all. After more than eighty years of living and twenty years of thinking, I have come to that dire conclusion. You children get ready; there’s a train a’comming… Alas already.

  5. There has always been only one source of freedom. Democracy. The question is, can it be maintained despite the forces outlined on these pages?

    The answer to that is based on, will people who actively accept that responsibility, to do whatever it takes to put freedom for all ahead of personal comfort, always maintain a majority over the long term?

    We’ve seen that we, the people can fall short of that requirement in the short term. But when the consequences bear down on us, enough recover their senses and take back our freedom. Will it always be thus?

    Sheila has pointed out to us often that civil literacy is one necessary attribute. I believe that lifelong learning is another. Are those highly interconnected concepts sufficiently hard wired into free people to survive the challenges?

    We’ll see, won’t we.

  6. Joe Stiglitz is from Gary and the brother of the long-time Lake County Sheriff. He’s been arguing the case for resolving income/wealth inequality since he served on Clinton’s council of Economic Advisors.

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