Joseph E. Stiglitz | The Price of Inequality

At Truth Out, there is an item Joseph E. Stiglitz | The Price of Inequality . The following is a quote from the article:

It would be one thing if the high incomes of those at the top were the result of greater contributions to society, but the Great Recession showed otherwise: even bankers who had led the global economy, as well as their own firms, to the brink of ruin, received outsize bonuses.

A closer look at those at the top reveals a disproportionate role for rent-seeking: some have obtained their wealth by exercising monopoly power; others are CEOs who have taken advantage of deficiencies in corporate governance to extract for themselves an excessive share of corporate earnings; and still others have used political connections to benefit from government munificence – either excessively high prices for what the government buys (drugs), or excessively low prices for what the government sells (mineral rights).

Likewise, part of the wealth of those in finance comes from exploiting the poor, through predatory lending and abusive credit-card practices. Those at the top, in such cases, are enriched at the direct expense of those at the bottom.

The usual cry from politicians like Mitt Romney and Scott Brown is that the rich deserve their income and low taxes.  No doubt some of them do.  However, it is about time we stop falling for such stereotypes as a generalization for the vast majority of the very rich.

Of course, there are even readers of this blog who might say, “Who is this guy Stiglitz, and what does he know?”  I’d prefer to understand his arguments and judge them on their merits than resort to a war of credentials.  There are a number of highly credentialed people whose judgment isn’t worth a bucket of spit. However, some of my readers do seem to be impressed by credentials so here it is from the article itself.

Nobel Prize-winning economist

I generally downplay the Nobel Prize in Economics by reminding myself that Milton Friedman also won a Nobel Prize.  So the prize in and of itself doesn’t prove much.

Here is the beginning of what WikiPedia has to say:

Joseph Eugene Stiglitz, ForMemRS, FBA (born February 9, 1943) is an American economist and a professor at Columbia University. He is a recipient of the Nobel Memorial Prize in Economic Sciences (2001) and the John Bates Clark Medal (1979). He is also the former Senior Vice President and Chief Economist of the World Bank. He is known for his critical view of the management of globalization, free-market economists (whom he calls “free market fundamentalists“) and some international institutions like the International Monetary Fund and the World Bank.

In 2000, Stiglitz founded the Initiative for Policy Dialogue (IPD), a think tank on international development based at Columbia University. Since 2001, he has been a member of the Columbia faculty, and has been a University Professor since 2003. He also chairs the University of Manchester‘s Brooks World Poverty Institute and is a member of the Pontifical Academy of Social Sciences. Stiglitz is an honorary doctor of Durham Business School,[1] an honorary doctor at the Charles University, an honorary professor at Tsinghua University School of Public Policy and Management and a member of the Executive and Supervisory Committee (ESC)[2] of CERGE-EI in Prague. Stiglitz is one of the most frequently cited economists in the world.[3]

Are you suitably impressed yet?

Leave a comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.