Inequality in America is degrading our trust- it’s time to start rebuilding it -By JOSEPH E STIGLITZ

[kpete]

In No One We Trust
By JOSEPH E. STIGLITZ
Opinionator Blog
New York Times
December 21, 2013, 2:39 pm

In America today, we are sometimes made to feel that it is naïve to be preoccupied with trust. Our songs advise against it, our TV shows tell stories showing its futility, and incessant reports of financial scandal remind us we’d be fools to give it to our bankers.

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… In the years leading up to the crisis, though, our traditional bankers changed drastically, aggressively branching out into other activities, including those historically associated with investment banking. Trust went out the window. Commercial lenders hard-sold mortgages to families who couldn’t afford them, using false assurances. They could comfort themselves with the idea that no matter how much they exploited their customers and how much risk they had undertaken, new “insurance” products — derivatives and other chicanery — insulated their banks from the consequences. If any of them thought about the social implications of their activities, whether it was predatory lending, abusive credit card practices, or market manipulation, they might have taken comfort that, in accordance with Adam Smith’s dictum, their swelling bank accounts implied that they must be boosting social welfare.

Of course, we now know this was all a mirage. Things didn’t turn out well for our economy or our society. As millions lost their homes during and after the crisis, median wealth declined nearly 40 percent in three years. Banks would have done badly, too, were it not for the Bush-Obama mega-bailouts.

This cascade of trust destruction was unrelenting…
…

… inequality has infected the heart of our ideals.

I suspect there is only one way to really get trust back. We need to pass strong regulations, embodying norms of good behavior, and appoint bold regulators to enforce them. We did just that after the roaring ’20s crashed; our efforts since 2007 have been sputtering and incomplete. Firms also need to do better than skirt the edges of regulations. We need higher norms for what constitutes acceptable behavior, like those embodied in the United Nations’ Guiding Principles on Business and Human Rights. But we also need regulations to enforce these norms — a new version of trust but verify. No rules will be strong enough to prevent every abuse, yet good, strong regulations can stop the worst of it.

Strong values enable us to live in harmony with one another. Without trust, there can be no harmony, nor can there be a strong economy. Inequality in America is degrading our trust. For our own sake, and for the sake of future generations, it’s time to start rebuilding it. That this even requires pointing out shows how far we have to go.

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http://opinionator.blogs.nytimes.com/2013/12/21/in-no-one-we-trust/?ref=opinion
via: http://www.dailykos.com/story/2013/12/21/1264557/-Joseph-Stiglitz-In-No-One-We-Trust

[cantbeserious]

1. Who Stole The American Dream - Video - Book - Powell Memo

"The promise of a prosperous middle-class life with decent work, rising living standards, and the potential for a better future has long been the foundation of the American dream. But as America continues to struggle to recover from the Great Recession, it has become clear that the middle class is in jeopardy -- and many of the policies of the last 40 years are to blame.

Examining the political, legislative, and corporate choices that have pushed the middle class to the brink, Pulitzer Prize- and Emmy Award-winning journalist, producer, and bestselling author Hedrick Smith details the story of this demise. In his new book, Who Stole the American Dream?, Mr. Smith analyzes how "pro-business" policies dismantled the previous American social contract and tells the stories of the people who have been left behind. ..."

The Book - Who Stole The American Dream

http://www.amazon.com/Stole-American-Dream-Hedrick-Smith/dp/1400069661

See the Powell Manifesto Here.

http://www.thwink.org/sustain/articles/017_PowellMemo/PowellMemoReproduction.pdf

Commentary Here.

http://www.thwink.org/sustain/articles/017_PowellMemo/
Most people are other people. Their thoughts are someone else's opinion

[cantbeserious]

2. Social Security Is Under Attack

Social Security Is Under Attack
By Elizabeth Warren, Reader Supported News
21 December 13

A generation ago, middle-class families were able to put away enough money during their working years to make it through their later years with dignity. On average, they saved about 11 percent of their take-home pay while working. Many paid off their homes, got rid of all their debts and retired with strong pensions from their employers. And where pensions, savings and investments fell short, they could rely on Social Security to make up the difference.

That was the story a generation ago, but since that time, the retirement landscape has shifted dramatically against our families.

Among working families on the verge of retirement, about a third have no retirement savings of any kind, and another third have total savings that are less than their annual income. Many seniors have seen their housing wealth shrink, as well. According to AARP, in 2012, one out of every seven older homeowners was paying down a mortgage that was higher than the value of their house.

Snip ...

http://readersupportednews.org/opinion2/277-75/21093-social-security-is-under-attack

[cantbeserious]

3. Raise The Minimum Wage

Raise the Minimum Wage
By Bernie Sanders, Reader Supported News
21 December 13

With states and local governments taking action to raise the minimum wage, Sen. Bernie Sanders called on Wednesday for Congress to pass legislation he cosponsored to push up the national minimum wage to $10.10 an hour. In Vermont, the wage will go up to $8.73 on New Year's Day. In Washington, D.C., the city council on Tuesday unanimously approved raising the minimum wage to $11.50 an hour, one of the highest rates among American cities. Of all the major economic issues facing our country - high unemployment, low wages, growing poverty and a widening income and wealth gap - raising the minimum wage is a way to address them all, Sanders said.

Snip ...

http://readersupportednews.org/opinion2/274-41/21086-focus-raise-the-minimum-wage%22

[cantbeserious]

4. The Mendacity And Pathology Of The Ultra Wealthy

[JHB]

5. Longer than "the years leading up". Decades.

Required reading.

Donald Barlett and James Steele are revisiting America: What Went Wrong, their landmark 1991 newspaper series, in a new project with the Investigative Reporting Workshop. Over the next year, the project team will examine how four decades of public policy has shaped America's ongoing economic crisis.

http://americawhatwentwrong.org

[abelenkpe]

6. We need to do something to stop offshoring good paying jobs

and reward companies that hire US workers in the US.

[Igel]

7. He's a few decades late to the game.

Social trust has been eroding in the US for quite a while.

There are slightly different kinds. Stiglitz sees social trust by one or two groups. He misses that he's in favor of things that destroy other kinds of trust, and just sees the consequences. It's hard to get outside of your own skin.

People like to talk about the "social contract"--they may not even usually use that term, but "American dream", "my America," etc., are close synonyms--but many have a rather restricted view of what it includes. They shred some parts of it and don't seem to notice that the ripping sound is "social contract."


Adjustments to any kind of contract usually result from negotiation, compromise, letting the need for change soak in. Pressure's appropriate, but when one side imposes the change it's usually going to breed resentment. And all I've seen happen since I was first aware of politics and read the newspaper was an increase, if not a nurturing, of resentment in American society.


This winter break I intend to get through Joshua Greene's _Moral Tribes_. And start _Crime & Punishment_ for the 3rd read-through.