Now We’re Doing Inequality on a world-class Level

by Joseph Stiglitz about the USA – Published on Current Concerns no 14, (Source: Vanity Fair.com: Of the 1%, by the 1%, for the 1%, Mai 2011, 5 pages long), August 22, 2011.

America has long prided itself on being a fair society, where everyone has an equal chance of getting ahead, but the statistics suggest otherwise: The chances of a poor citizen, or even a middle-class citizen, making it to the top in America are smaller than in many countries of Europe. The cards are stacked against them. It is this sense of an unjust system without opportunity that has given rise to the conflagrations in the Middle East:  

  • rising food prices and growing and persistent youth unemployment simply served as kindling.
  • With youth unemployment in America at around 20 percent (and in some locations, and among some socio-demographic groups, at twice that);
  • with one out of six Americans desiring a full-time job not able to get one;
  • with one out of seven Americans on food stamps (and about the same number suffering from “food insecurity”) – given all this, there is ample evidence that something has blocked the vaunted “trickling down” from the top 1 percent to everyone else. […]

The upper 1 percent of Americans are now taking in nearly a quarter of the nation’s income every year. In terms of wealth rather than income, the top 1 percent control 40 percent. Their lot in life has improved considerably. Twenty-five years ago, the corresponding figures were 12 percent and 33 percent. […]

When you look at the sheer volume of wealth controlled by the top 1 percent in this country, it’s tempting to see our growing inequality as a quintessentially American achievement – we started way behind the pack, but now we’re doing inequality on a world-class level. And it looks as if we’ll be building on this achievement for years to come, because what made it possible is self-reinforcing. […]

The personal and the political are today in perfect alignment. Virtually all U.S. senators, and most of the representatives in the House, are members of the top 1 percent when they arrive, are kept in office by money from the top 1 percent, and know that if they serve the top 1 percent well they will be rewarded by the top 1 percent when they leave office. By and large, the key executive-branch policymakers on trade and economic policy also come from the top 1 percent. […]

In terms of income equality, America lags behind any country in the old, ossified Europe that President George W. Bush used to deride. Among our closest counterparts are Russia with its oligarchs and Iran. While many of the old centers of inequality in Latin America, such as Brazil, have been striving in recent years, rather successfully, to improve the plight of the poor and reduce gaps in income, America has allowed inequality to grow.[…]

Economists long ago tried to justify the vast inequalities that seemed so troubling in the mid-19th century – inequalities that are but a pale shadow of what we are seeing in America today. […]

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