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Inequality Is Holding Back the Recovery
NY Times Op-Ed ^ | 1-19-2013 | Joseph Stiglitz

Posted on 01/21/2013 11:58:19 AM PST by Sir Napsalot

Politicians typically talk about rising inequality and the sluggish recovery as separate phenomena, when they are in fact intertwined. Inequality stifles, restrains and holds back our growth. When even the free-market-oriented magazine The Economist argues — as it did in a special feature in October — that the magnitude and nature of the country’s inequality represent a serious threat to America, we should know that something has gone horribly wrong. ...

There are four major reasons inequality is squelching our recovery. The most immediate is that our middle class is too weak to support the consumer spending that has historically driven our economic growth. While the top 1% of income earners took home 93% of the growth in incomes in 2010, the households in the middle — who are most likely to spend their incomes rather than save them and who are, in a sense, the true job creators — have lower household incomes, adjusted for inflation, than they did in 1996. ....

Second, the hollowing out of the middle class since the 1970s, a phenomenon interrupted only briefly in the 1990s, means that they are unable to invest in their future, by educating themselves and their children and by starting or improving businesses.

Third, the weakness of the middle class is holding back tax receipts, especially because those at the top are so adroit in avoiding taxes and in getting Washington to give them tax breaks. ....

Fourth, inequality is associated with more frequent and more severe boom-and-bust cycles that make our economy more volatile and vulnerable. Though inequality did not directly cause the crisis, it is no coincidence that the 1920s — the last time inequality of income and wealth in the United States was so high — ended with the Great Crash and the Depression.

(Excerpt) Read more at opinionator.blogs.nytimes.com ...


TOPICS: Business/Economy
KEYWORDS: demagogicparty; idiocy; income; incomeinequality; josephstieglitz; josephstiglitz; liberalfascism; lunacy; marxism; nyslimes; nytimes; obamaeconomy; obamarecession; obamataxhike; onequality; redistibution; stieglitz; taxes
[Joseph E. Stiglitz, a Nobel laureate in economics, a professor at Columbia and a former chairman of the Council of Economic Advisers and chief economist for the World Bank, is the author of “The Price of Inequality.”]

Following his logic, the most ‘equaled society/nation’ then should enjoy (have enjoyed) the best economic prosperity, then.

Those academic types never seemed to envision while ‘forcing more equality’ onto a society, there will inevitably be involved with dictatorship or something close to it.

1 posted on 01/21/2013 11:58:23 AM PST by Sir Napsalot
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To: Sir Napsalot

So...just pass a law making everyone equal. What’s the problem? [/s]


2 posted on 01/21/2013 12:01:17 PM PST by rbg81
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To: Sir Napsalot

I would say inequality created by tax brackets is causing people who are acheivers to stay in the middle instead of moving up the ladder making it impossible for people on the bottom from moving up....

I have known people who ahve been ambitious who have been crushed by the fact that should they take a promotion they would earn less because it would boost them into a higher tax bracket and it would take 5 years worth of promotion before they ended up “breaking even” the effect this has on the people at the bottom who stay there because there is no forward flow is INCALCUABLE!


3 posted on 01/21/2013 12:02:13 PM PST by GraceG
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To: Sir Napsalot

Thanks for sharing this revealing peak into the mind of a UN communist economist.


4 posted on 01/21/2013 12:03:09 PM PST by fireman15 (Check your facts before making ignorant statements.)
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To: Sir Napsalot

Just mint a whole bunch of those trillion dollar coins, distribute them to everyone, and we will mostly be on pretty equal footing. Wouldn’t that fix everything?


5 posted on 01/21/2013 12:03:22 PM PST by ClearCase_guy (Nothing will change until after the war.)
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To: Sir Napsalot
Another fine example of militant stupidity in academia.

That it would have found both expression and support via the NYT is a (sadly) laughable certainty.


spit

6 posted on 01/21/2013 12:08:25 PM PST by tomkat ( .. shall NOT be infringed)
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To: Sir Napsalot

leftists are seriously ignorant when it comes to economics

half the people pay NO taxes, how is that for inequality?


7 posted on 01/21/2013 12:08:42 PM PST by GeronL (http://asspos.blogspot.com)
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To: Sir Napsalot

The most “equal” societies on earth in terms of wealth are the primitive hunter-gatherer tribes that haven’t made any significant technological progress in thousands of years. That’s hardly a state that I think we ought to aspire to!


8 posted on 01/21/2013 12:10:36 PM PST by jpl (The government spent another half a million bucks in the time it just took you to read this tagline.)
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To: Sir Napsalot

Yeah, not enough government coercion. That’s why the USSR went belly up.


9 posted on 01/21/2013 12:14:57 PM PST by PapaNew
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To: Sir Napsalot

The author makes this statement:The Obama administration does not, of course, bear the sole blame. President George W. Bush’s steep tax cuts in 2001 and 2003 and his multitrillion-dollar wars in Iraq and Afghanistan emptied the piggy bank while exacerbating the great divide.

Multi trillion dollar wars? Can we finally put that myth to rest? Here is the cost of both wars through 30 sep 2012:War Costs To Date
[Note: These totals are based on appropriations that provide funding through the end of the current fiscal year on September 30, 2012.]

•Total War Funding: $1.38 trillion has been allocated to date to fund the wars in Iraq and Afghanistan, including $121.1 billion in fiscal year 2012.
•Iraq: To date, $807.4 billion has been allocated for the war in Iraq since 2003, including $10.1 billion in fiscal year 2012.
•Afghanistan: To date, $570.9 billion has been allocated for the war in Afghanistan since 2001, including $111.1 billion in fiscal year 2012.

Source: National Priorities Project.

Please note that Obama’s Stimulus alone cost more than the Iraq war.


10 posted on 01/21/2013 12:18:22 PM PST by csmusaret (I will give Obama credit for one thing- he is living proof that familiarity breeds contempt.)
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To: Sir Napsalot

You mean THIS Joseph Stiglitz?

http://blogs.wsj.com/developments/2012/10/01/how-joseph-stiglitz-misread-the-risks-at-fannie-mae/

How Joseph Stiglitz Misread the Risks at Fannie Mae

A March 2002 paper in this series by Dr. Stiglitz and others found that the probability of default by Fannie or Freddie was “extremely small.” The economists studied the risk-based capital requirements recently imposed by Fannie’s regulator. These capital requirements were based on a “stress test,” producing estimates of how much capital Fannie and Freddie would need to survive a sharp rise or fall in interest rates, coupled with a long-term surge in mortgage defaults. “The implied credit loss rate (under the stress test) is more than five times as large as the national credit loss rate in any year since 1980,” the paper said. The probability of the stress-test conditions actually occurring was less than one in 500,000, the authors wrote.


11 posted on 01/21/2013 12:19:42 PM PST by dirtboy
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To: GraceG
should they take a promotion they would earn less because it would boost them into a higher tax bracket

A "higher tax bracket" applies to MARGINAL not TOTAL income; a raise never means less after-tax income, although it may mean you keep a smaller percentage of the amount of your raise than of your pre-raise pay.

12 posted on 01/21/2013 12:21:49 PM PST by JustSayNoToNannies ("The Lord has removed His judgments against you" - Zep. 3:15)
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To: JustSayNoToNannies

Bull crap. Just before I got sick and could not work for nearly a year I took in $42,000. When I got sick the total I took in with government support was about $45,000. This is after a very steep pay cut. If that is not incentive to not work I don’t know what is. I made less by not working and earning more. When I looked at the tax money that was stolen from others and given to me I realized how out of whack our system really was. I do my best now to pay as little in taxes that I can. The money is just wasted.


13 posted on 01/21/2013 12:33:37 PM PST by jimpick
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To: jimpick
should they take a promotion they would earn less because it would boost them into a higher tax bracket

A "higher tax bracket" applies to MARGINAL not TOTAL income; a raise never means less after-tax income, although it may mean you keep a smaller percentage of the amount of your raise than of your pre-raise pay.

Bull crap. Just before I got sick and could not work for nearly a year I took in $42,000. When I got sick the total I took in with government support was about $45,000. This is after a very steep pay cut.

That has nothing to do with the original claim about higher tax brackets.

14 posted on 01/21/2013 12:35:56 PM PST by JustSayNoToNannies ("The Lord has removed His judgments against you" - Zep. 3:15)
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To: JustSayNoToNannies

So you are saying that the $10,500 that I got from a tax return is not after tax income then? I did not earn it by working more but I had it after my taxes were done.


15 posted on 01/21/2013 12:40:35 PM PST by jimpick
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To: Sir Napsalot

So raise taxes again on those Eeeeevil Rich and send everyone in the middle class a Walmart gift certificate.

Seems simple enough.


16 posted on 01/21/2013 12:41:04 PM PST by Buckeye McFrog
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To: Sir Napsalot
our middle class is too weak to support the consumer spending that has historically driven our economic growth. [...]

Second, the hollowing out of the middle class since the 1970s, a phenomenon interrupted only briefly in the 1990s, means that they are unable to invest in their future, by educating themselves and their children and by starting or improving businesses.

True - but unrelated to "inequality." Does Stiglitz think we'd improve these issues by bombing and incinerating the assets of the rich? That would reduce inequality.

17 posted on 01/21/2013 12:43:35 PM PST by JustSayNoToNannies ("The Lord has removed His judgments against you" - Zep. 3:15)
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To: jimpick
So you are saying that the $10,500 that I got from a tax return is not after tax income then?

So the "government support" came in the form of a tax credit or the like? That's a disincentive to promotion (the original claim) only for those currently getting that credit.

18 posted on 01/21/2013 12:46:24 PM PST by JustSayNoToNannies ("The Lord has removed His judgments against you" - Zep. 3:15)
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To: rbg81
A few comments for Mr. Stiglitz.

First, equality can refer to many, many things, and one of them is equality of effort. In the story of the three little pigs, it is the industrious little pig who builds a strong house out of bricks while his neighbors, the other two little pigs, spent much less time and effort building their homes and made them more quickly out of less durable materials. When the time came for the big bad wolf to come eat them, only the third little pig was safe, because of his efforts.

Now, following your line of flawed logic, the problem would be the inequality in housing. You and your brethren on the left would likely say that the third little pig was a 1%er, and should have to ‘give his fair share’ to provide for the other two little pigs. You would not say that the other two little pigs were responsible for their own problems, because of their lack of equal effort. Of course, this is unfair to the third little pig - the industrious one, but using your line of reasoning only the outcome of ‘equality’ would matter.

Which brings me to the second point, which is that you are a hypocrite. As an academic you are definitively a member of one of the most hierarchical societal institutions that exists. Do you consider Instructors, Assistant Professors, and Associate Professors equal to Full Professors? Why not? Where's the equality? Why don't you just make everyone a Full Professor, from day one? Wouldn't that be fair? What about tenure? Why should only some people be tenured, while others have no long-term job security of the type that tenured faculty have? Don't you support ‘equality’.

Oh, one additional thought. In the 3 little pigs story, for the third little pig, the industrious one, to give safe harbor to the other two, voluntarily because he wanted to help them, would be the right thing to do - as an act of charity. In turn, the right thing for the other two pigs to do would be to thank him and be grateful. Charity, however, is not what the left wants from people. They want to take and redistribute, because then a grateful thank you is not required.

19 posted on 01/21/2013 12:47:23 PM PST by pieceofthepuzzle
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To: Sir Napsalot

If this article reflects reality then the fate of the middle class is exactly what Marx predicted years ago.


20 posted on 01/21/2013 12:53:21 PM PST by AEMILIUS PAULUS (It is a shame that when these people give a riot)
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To: Sir Napsalot
because those at the top are so adroit in avoiding taxes and in getting Washington to give them tax breaks

Small minded slow thinkers can only blame the ones who get the tax breaks whilst ignoring the ones who give the tax breaks. CEOS and lobbyist do not write the tax code. Place the blame where it belongs, on the people you can remove by your votes.

“The worst form of inequality is to try to make unequal things equal.” Aristotle

21 posted on 01/21/2013 12:54:21 PM PST by MosesKnows
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To: Sir Napsalot

balderdash

I say the greatest source of inequality in this nation is illegitimacy

A woman who elects to have a child or children without a spouse and economic partner faces a lifetime of being financially behind 2 parent households, and their children face a poverty of spirit that comes from not having 2 parents who love and support each other and their children and model it in their lives together as a family

Just walk through any minimum wage workplace and see the number of single mothers struggling to get by on marginal wages. I would bet a parent’s marital status affects their lifetime income more than their education level


22 posted on 01/21/2013 12:57:59 PM PST by silverleaf (Age Takes a Toll: Please Have Exact Change)
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To: Sir Napsalot

North Korea is highly equal.

Explain that one, Joseph S.


23 posted on 01/21/2013 1:00:12 PM PST by Uncle Miltie (Before we argue, are you approved to speak by the Bureau of Alcohol, Firearms and Speech?)
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To: Sir Napsalot

Solve inequality without theft, jerk. I dare you.

It always boils down to theft with leftists.


24 posted on 01/21/2013 1:01:53 PM PST by Uncle Miltie (Before we argue, are you approved to speak by the Bureau of Alcohol, Firearms and Speech?)
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To: Sir Napsalot
Inequality is the problem. I absolutely believe that inequality is crushing our economy, our nation.

The unequal tax burden that we are saddled with - 49% are not paying taxes or are taking tax credits that they never earned.

The unequal distribution of handouts aka "redistribution of my wealth". The same people that are not paying taxes are getting a free ride- everything from rent to cell phones, if you've worked to earn it, they want it too.

The unequal distribution of "stimulus" money and "get out of jail free cards" to companies that support the leftist agenda.

25 posted on 01/21/2013 1:05:41 PM PST by NativeSon ( Grease the floor with Crisco when I dance the Disco)
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To: Sir Napsalot

What would it take for Stiglitz’s of the world to acknowledge ‘our own gorvernment is holding back the recovery’?

From wiki: “.... one of the most frequently cited economists in the world,[7] and in 2011 he was named by Time magazine as one of the 100 most influential people in the world.[8]”

** Dr. Sowell is also a frequently cited economist, but of course those citings don’t count.


26 posted on 01/21/2013 1:09:12 PM PST by Sir Napsalot (Pravda + Useful Idiots = CCCP; JournOList + Useful Idiots = DopeyChangey!)
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To: Sir Napsalot

Stiglitz is unaware of the sad reality posed by the product of four generations of Pooblik Skruel Collective ‘graduates’.

Many of the grads are functionally illiterate, violence prone, have little to no socialization and richly deserve their Urban Feral” description.

Factor in a measurably lower I.Q. and nothing some Libtard bleats about will alleviate the deficit of those Urban Ferals.


27 posted on 01/21/2013 1:10:07 PM PST by GladesGuru (In a society predicated upon freedom, it is necessary to examine principles."..)
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To: Sir Napsalot
To Lefties, "inequality" occurs anytime somebody else is better at something than they are.
28 posted on 01/21/2013 1:10:41 PM PST by E. Pluribus Unum (TYRANNY: When the people fear the politicians. LIBERTY: When the politicians fear the people.)
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To: E. Pluribus Unum

The have a complete lack and utter disregard for history.. Lefties need to re-read “Animal Farm” by George Orwell.. That famous line “yes but some animals are more equal than others” comes to mind..

this equality crap talk, never works... mankind and the universe in general, is hardwired to compete, and that means : winners and losers.


29 posted on 01/21/2013 1:16:46 PM PST by Chuzzlewit
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To: Sir Napsalot

Income = Net Work
Wealth = Net Worth

So why are we so hell bent on raising income taxes?


30 posted on 01/21/2013 1:17:58 PM PST by stocksthatgoup (ZERO DARK THIRTY (coming soon to an embassy near you))
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To: Sir Napsalot
More excerpt dribble from the Professor

We could have recognized that when young people are jobless, their skills atrophy. We could have made sure that every young person was either in school, in a training program or on a job. Instead, we let youth unemployment rise to twice the national average.

Respectfully, sir, (1) How do you 'make sure' every young person is "either in school, in a training program or on a job"? Don't young persons have any say in this? (2) In school for what, in training for what? Are there going to be gubmint minders telling those young persons what they should learn and what kind of jobs they should or should not have?

31 posted on 01/21/2013 1:28:02 PM PST by Sir Napsalot (Pravda + Useful Idiots = CCCP; JournOList + Useful Idiots = DopeyChangey!)
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To: Sir Napsalot

Note to the author: Bull**** doesn’t feed the bull dog.


32 posted on 01/21/2013 1:54:16 PM PST by TigersEye (Stupid is a Progressive disease.)
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To: Chuzzlewit
The don't believe in "equality."

"Equality" is just another tool for overwhelming the system.

33 posted on 01/21/2013 1:56:24 PM PST by E. Pluribus Unum (TYRANNY: When the people fear the politicians. LIBERTY: When the politicians fear the people.)
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To: Sir Napsalot

“Inequality Is Holding Back the Recovery”

In a blinding flash of leadership and inspiration, Columbia University and the New York Times announced that immediately, no one on the faculty or staff of Columbia or on the staff of the New York Times will be paid more than the National Median salary.

In solidarity with this courageous action, the Board of Regents of Columbia, the Board of Directors of the NYT and the owners of the NYT announced that ALL of their Bank accounts and investments in excess of $250,000 (Obama’s cut-off for “wealthy”) will be signed over to the US Treasury to be applied exclusively to payment of the National Debt.

Furthermore, all of their real estate holdings in excess of a 3,000 sq. ft. primary residence and a 1,500 sq. ft vacation home will be signed over to either The Salvation Army or Habitat for Humanity for transfer to poor families and the homeless.

The celebratory bonfire (simulated - carbon footprint, you know) will be held in Central Park Saturday, Jan 26, complete with S’mores and singing. Please bring your guitars, tambourines and sheet music for “Kumbaya”.


34 posted on 01/21/2013 2:42:45 PM PST by BwanaNdege ("To learn who rules over you simply find out who you are not allowed to criticize"- Voltaire)
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To: pieceofthepuzzle

Actually, I tooo am an academic. But before I became one, I was an AF officer for 21 years. Maybe you missed the [/s] in my initial post. In any case, I am under no illusion that everyone is equal or, for that matter, that everyone has “equal” opportunity. Ideally, opportunity should be both fair and equal, but we don’t live in a perfect world....and never will.

I once had an after-dinner discussion with one of my colleagues on the subject of who could get a PhD in Computer Science. His assertion was that anyone could do it. At first I thought he was kidding, especially because so many students clearly have trouble with introductory programming and Calculus, I pointed out that the task required a degree of intelligent, motivation, and work-ethic that most people lacked. But he continued to insist that anyone could do it if they simply tried hard enough, After a while, it dawned on me that he was being totally serious, especially when the discussion started to get heated. It still floors me to think that someone who taught in the same Dept could have such a different view of reality when presented with similar experiences.


35 posted on 01/21/2013 2:43:25 PM PST by rbg81
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