Vox Populi

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Joseph E. Stiglitz: People Who Break the Rules Have Raked in Huge Profits, Sickening Our Politics

The following is taken from a transcript of Joseph Stiglitz’s remarks to the AFL-CIO convention in Los Angeles on September 8, 2013.

I’m an economist — I study how economies work and don’t work. It’s been clear to me that our economy has been sick for a long time. One of the reasons it’s been so sick is inequality and I decided to write an article and a book about it.

Two years ago, I wrote an article for Vanity Fair called, “Of the 1%, by the 1%, for the 1%,” which really got to the gist of it. For too long, the hardworking and rule-abiding had seen their paychecks shrink or stay the same, while the rule-breakers raked in huge profits and wealth. It made our economy sick and our politics sick, too.

You all know the facts: while the productivity of America’s workers has soared, wages have stagnated. You’ve worked hard — since 1979, your output per hour has increased 40 percent, but pay has barely increased. Meanwhile, the top 1 percent take home more than 20 percent of the national income.

We have become the advanced country with the highest level of inequality, with the greatest divide between the rich and the poor. We use to pride ourselves — we were the country in which everyone was middle class. Now that middle class is shrinking and suffering.

The Great Recession made things worse. Some say that the recession ended in 2009. But for most Americans, that’s simply wrong: 95 percent of the gains from 2009 to 2012 went to the upper 1 percent. The rest — the 99 percent — never really recovered.

More than 20 million Americans who would like a full time job still can’t get one, incomes are still lower than they were a decade and a half ago, wealth in the middle is back to where it was two decades ago. Young Americans face a mountain of student debt and dismal job prospects. We have become the advanced country with the highest level of inequality, with the greatest divide between the rich and the poor. We used to pride ourselves — we were the country in which everyone was middle class. Now that middle class is shrinking and suffering.

The central message of my book, The Price of Inequality, is that all of us, rich and poor, are footing the bill for this yawning gap. And that this inequality is not inevitable. It is not, as Rich said yesterday, like the weather, something that just happens to us. It is not the result of the laws of nature or the laws of economics. Rather, it is something that we create, by our policies, by what we do.

We created this inequality — chose it, really — with laws that weakened unions, that eroded our minimum wage to the lowest level, in real terms, since the 1950s, with laws that allowed CEOs to take a bigger slice of the corporate pie, bankruptcy laws that put Wall Street’s toxic innovations ahead of workers. We made it nearly impossible for student debt to be forgiven. We underinvested in education. We taxed gamblers in the stock market at lower rates than workers and encouraged investment overseas rather than at home. [continue reading]

  — by Joseph Stiglitz in remarks to the AFL-CIO convention in Los Angeles on September 8, 2013.

 

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false idol

A replica of the iconic Wall Street bull is lifted as a symbol of greed during a protest rally to support low-wage workers as part of National Day of Action in New York City on Tuesday, July 24, 2012. (AP Photo/Bebeto Matthews)

One comment on “Joseph E. Stiglitz: People Who Break the Rules Have Raked in Huge Profits, Sickening Our Politics

  1. TheProgressiveParadigm
    August 30, 2014

    Great piece !

    Like

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