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| Stiglitz |
"... and the poor get poorer," goes the increasingly accurate but abominably titled song, "
Ain't we got fun." Well-known economist Joseph E. Stiglitz, whom the New York Times describes as "a Nobel laureate in economics, a Columbia professor and a former chairman of the Council of Economic Advisers and chief economist for the World Bank," may as well have quoted that song (omitting the "fun" part) to describe the growth in economic inequality among individuals within developed nations: since the 1980s,
individual inequality has grown, using as a basis a paper by World Bank economist Branko
Milanović,
The Haves and the Have-Nots: A Brief and Idiosyncratic History of Global Inequality:
...
... While the gap between some regions has markedly narrowed — namely, between Asia and the advanced economies of the West — huge gaps remain. Average global incomes, by country, have moved closer together over the last several decades, particularly on the strength of the growth of China and India. But overall equality across humanity, considered as individuals, has improved very little. ...
So while nations in Asia, the Middle East and Latin America, as a whole, might be catching up with the West, the poor everywhere are left behind, even in places like China where they’ve benefited somewhat from rising living standards.
From 1988 to 2008, Mr. Milanovic found, people in the world’s top 1 percent saw their incomes increase by 60 percent, while those in the bottom 5 percent had no change in their income. And while median incomes have greatly improved in recent decades, there are still enormous imbalances: 8 percent of humanity takes home 50 percent of global income; the top 1 percent alone takes home 15 percent. ...
The United States provides a particularly grim example for the world. ...
On the one hand, widening income and wealth inequality in America is part of a trend seen across the Western world. A 2011 study by the Organization for Economic Cooperation and Development found that income inequality first started to rise in the late ’70s and early ’80s in America and Britain (and also in Israel). The trend became more widespread starting in the late ’80s. ...
Of the advanced economies, America has some of the worst disparities in incomes and opportunities, with devastating macroeconomic consequences. The gross domestic product of the United States has more than quadrupled in the last 40 years and nearly doubled in the last 25, but as is now well known, the benefits have gone to the top — and increasingly to the very, very top.
Last year, the top 1 percent of Americans took home 22 percent of the nation’s income; the top 0.1 percent, 11 percent. Ninety-five percent of all income gains since 2009 have gone to the top 1 percent. ...
...
(Bolds mine. - SB)
Please note that this 30-odd-year decline in the economic wellbeing of the lower and lower-middle classes in America spans three Republican presidencies and parts of three Democratic presidencies. It spans vast improvements in technology, especially information technology. It also spans historically unprecedented growth in productivity.
Much good that has done the 99% of us. It doesn't seem to matter whom we elect to the presidency or to Congress. It doesn't seem to matter what we do... only the top 1% are able to get ahead, while the rest of us scrape for what we get, and get a portion of all that average economic growth that never really increases. (Beware any author who praises average incomes. Unless you are wealthy or at least well-off, averages have little meaning. The average— the mean— of your income and that of Bill Gates is probably in the billions of dollars; averages are used mostly by Republicans to paper over bad news for the lower and middle classes.)
And poverty... please see
this chart for the US and Texas from 1980 to 2007. Note that poverty goes up and down, but never really descends below 11% in "the greatest nation on Earth."
Welcome to our brave new world.
Stiglitz concludes:
...
Inequality and poverty among children are a special moral disgrace. They flout right-wing suggestions that poverty is a result of laziness and poor choices; children can’t choose their parents. In America, nearly one in four children lives in poverty; in Spain and Greece, about one in six; in Australia, Britain and Canada, more than one in 10. None of this is inevitable. ...
For these reasons, I see us entering a world divided not just between the haves and have-nots, but also between those countries that do nothing about it, and those that do. Some countries will be successful in creating shared prosperity — the only kind of prosperity that I believe is truly sustainable. Others will let inequality run amok. ...
Stiglitz does not explicitly say which category includes the United States. What do you think?
According to Geithner, the expression "wall of money" is a reference to some visible sign banks must use (e.g., stacks of paper money in bank windows) to reassure customers that the bank is solvent and they (the customers) need not participate in a bank run.
