The Nobel prize-winning economist talks about how the US economy, if not already broken, is on its way to becoming so because of the rapidly rising inequality that is becoming entrenched and hereditary as the rich put in place laws that preserve their privileges. He dates the beginning of decline to 1980 when the divergence between the very rich and the rest of us began.
The full interview takes about 16 minutes and is split into three parts and is well worth watching.
Part 1:
Part 2:
Part 3:
(These clips appeared on July 25, 2012. To get suggestions on how to view clips of The Daily Show and The Colbert Report outside the US, please see this earlier post.)
Remarkable. Though not as extreme as in the USA the inequality has risen in The Netherlands as well. Indeed a former Dutch Politician, Marcel van Dam (he has a small entry on English Wikipedia) dates the beginning of this rise around 1980 as well.
Why do “they” say Social Security (SS) is broke? That’s very simple. There’s actually a surplus in SS. Congress sees that money and forces SS to buy Treasury bonds with the surplus. As a result, SS appears to be broke because there’s no surplus and the Boomers (of whom I am one) will start collecting our Social Security benefits, increasing SS debits. Which means SS will have less of a surplus, so will buy fewer bonds, and thus give less money for Congress to spend.
Admit it, Mano, you posted this to entice me, FtB’s Resident Economist™, to comment on it.
First, a disclosure: I am an admirer and friend of Joseph Stiglitz. He supported me during my argument with Larry Summers about market regulation. That was not just because I supported him in his fight with Summers about the IMF and the post-Communist Eastern European economies.* In the end, we were both forced out of our jobs. Yes folks, economics can be a full-contact sport at times.
Stiglitz’s work on information asymmetry (PDF) and efficiency wages show him to be one of the premier economists living today.
I particularly like Stiglitz’s Third Way economic philosophy (PDF). Yeah, I know Keynesian economists aren’t supposed to like Third Way. Oh well.
*In 1997 Stiglitz was appointed Vice President and Chief Economist of the World Bank. He wrote a paper reviewing the transition of former Communist countries to market economies. He showed failures in the countries that had followed the International Monetary Fund (IMF) shock therapy policies--both in terms of the declines in GDP and increases in poverty--that were even worse than had been envisioned at the onset of the transition. Clear links existed between the dismal performances and the policies that the IMF had advocated, such as voucher privatization schemes and excessive monetary stringency. Meanwhile, the success of a few countries which had followed quite different strategies suggested that there were alternatives that could have been followed. The Treasury Department (i.e., Summers) put enormous pressure on the World Bank to silence his criticisms of the policies which Treasury and the IMF had pursued.
My last comment is “awaiting moderation” because I put three links in it.
Yes, this was indeed ‘Tis bait! It is always helpful when people who know the background chime in.
I bought the book that was advertised on the show -- it looks like an excellent read. I’ll also look at the documents you linked to ‘Tis -- that looks like interesting information.
Regrettably, how many Americans are going to watch something like this -- someone who knows what he’s talking about -- as opposed to buying whatever nonsense about ‘job creators’ and ‘punishing the successful’ gets screamed the loudest by the angriest know-nothings?
Wikipedia says,