19 February 2009

Why is Nobody Talking About Inequality?

I've just watched this presentation by economist Joseph Stiglitz, broadcast live from Columbia Business School. The topic? Our economic crisis. Interestingly, Stiglitz begins by stating quite baldly that the underlying problem with our economy stemmed from the massive increase in income and wealth inequality in the U.S. and elsewhere. As he stated it, you dramatically shift resources from those with a higher higher propensity to spend to those with a lower marginal propensity to spend. Consequence? Inadequate aggregate demand. Stiglitz then traces the fiasco with the financial and real estate markets to that underlying factor.

In the bulk of his talk, Stiglitz discusses the three aspects of he Obama economic recovery program: stimulus package, housing recovery program, and financial market remedies. All are, on his account, at best, inadequate and ill-designed. He talks at the end about the prospect of nationalizing the banks in one or another way. And he thinks that is likely the right course of action.

I think Stiglitz is more or less on the money on the topics he actually addresses. But what he never really talks about is how we might remedy the underlying problem: political-economic inequality. Our real problem is that no one is actually talking about the real problem!

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Blogger Unknown said...

This is an interesting question. From the seventies the question of equality progressively shifted out of sight.

But I would not ask myself why nobody is speaking about. My interest is instead on the "why nobody seems to ask for it".

I derived a partial answer from the analysis of the break down of the "socialists principles" as depicted by Friedman in beginnings of the "world is flat". He ascribes it to the substitution of the classical relation exploiters/exploited with a chain of exploiters on a global scale.

An other factor could also be the rise of a progressive enlarging fracture in cultural inequality. To feel the inequality you have to perceive it.

Certainly, as of today, things are a lot more blurred than, say, 30 years ago.

20 February, 2009 03:38  
Anonymous Anonymous said...

Damn, I would have loved to see this!

20 February, 2009 03:52  
Blogger Jim Johnson said...


I think your basic question is just right.

And the notion that the inequality is in various ways invisible is on the money too.


20 February, 2009 09:50  
Blogger EM said...

Hey, Long time no talk. To something totally of topic: There is all this craziness going on in Boston over the arrest of Shepard Fairey. The story reminded me of you art and politics class. There are some interesting articles on the ny times website!

20 February, 2009 14:35  
Blogger Unknown said...

So, what to we do about inequality beyond unionization - slow, local and directed primarily at large companies, or appealing to government policy - loophole prone and reversible by the next administration? We need a Plan B that's bottom up and has global scale.

Maybe these guys at www.openyear.org are on to something. They're trying to make sharing the wealth cool and easy to do. See their video here

Voting, blogging and good policy aren't enough. We need something technological that's built in to work itself, and moves at the speed of businesses, to help ameliorate inequality.

20 February, 2009 17:41  
Blogger One is all I need said...

I like your point on political inequality. A lot was made over the energized Democratic base and the increase in younger voters in the 08 election. I think both these things will have a nominal effect in addressing political inequality in the future. What progressives and liberals want for the poor, minorities and the working class are often lofty, sophisticated (requiring a lengthy investment in time) and inaccessible policies. I think rebalancing political inequality happens along a continuum. First comes getting people engaged, second comes making politicians accountable. I think the rebalancing would happen naturally for the poor, minorities and working class if the distribution of the political benefit were transparent on the local level. That is, each politician probably has a very limited sphere of where he/she can affect political outcomes, yet if the poor, minorities and the working class could see more clearly the specific changes politicians could affect, they would become more engaged in the process in order to get their needs met and make politicians more accountable.

20 February, 2009 19:28  
Blogger Jim Johnson said...


Policies (the Emplyee Free Choice act is a start) that subvert the current extreme advantage employers have in fighting unions are a start. Unionization is not simply a direct response, but indirectly sustains higher levels of turnout for policy changes down the road.

Among the latter, working on systematic tax reform to increase progressivity in a dramatic way and something like a living or plausible minimum wage. Systematic health care reform would be a big step too.

Of course the rich and the ideologues will fight all that (possibly excepting the health care bit) tooth and nail. But, so what?

20 February, 2009 21:13  
Blogger Jim Johnson said...

E ... Nice to hear from you. I hope all is well there in Boston! JJ

20 February, 2009 21:23  

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