Nobel Laureate Joseph Stiglitz: Which candidate (or potential candidate) do you think is best [View all]

[Ichingcarpenter]

Which candidate (or potential candidate) do you think is best for the economy in 2016?

JS: As far as I know, all three of the announced Democratic candidates — Bernie Sanders, Hilary Clinton — and…has [Martin] O’Malley announced? They’ve all actually announced that they’re very concerned about the issue. And they have begun to roll out agendas. Bernie Sanders is the most progressive and has been most articulate over a longer period of time, laying out a pro-equality agenda.

joseph stiglitzNobel prize winning economist and professor Joseph Stiglitz sat down with us last week to talk about the alarming state of income inequality in the US, prior to a scheduled talk for the Commonwealth Club in Palo Alto.



Stiglitz talked about the troubling trend of income inequality in the US and offered his thoughts on topics central to the economy:



BUSINESS INSIDER: To start, how bad is income inequality in the US today?

JOSEPH STIGLITZ: Well … pretty bad. The fact that it’s so much worse than other vast countries says something. And, it has some dimensions that are very particular to the United States that have been exemplified by the riots in Ferguson, the riots in Baltimore. There’s a racial element to it. And that racial element illustrates that the inequality can’t just be described as market forces. That the oppression that one saw and has seen repeatedly with African Americans is a reflection of brute force of one kind. In a more subtle way, the kind of force — power — is exemplified in the market. So, our inequality isn’t just the outcome of the natural workings of markets. It’s monopoly power, it’s the weakening of unions, it’s an amalgam of the way we structure our society, structure our economy, high CEO pay. It’s a lot of exploitation, which you saw so vividly during the years before the crisis — predatory lending — one group taking advantage over another. Unfortunately, people at the top taking advantage in way of the people at the bottom.


BI: How do we stem such a drastic rise in income inequality?

JS: Well, there is no magic bullet. And you don’t undo a third of a century or more of mistaken policies overnight. But, you have to first recognize there’s a problem. Secondly, you have to try to undo some of the mistakes. Change corporate governance in ways that curtail the top, curb the financial sector, reduce abuses of market power — that’s one.

A second piece that’s important is there needs to be a very clear, symptomatic relief. We’re not gonna solve the underlying problems overnight, but we have to address the worst manifestations of a flawed economic system. So, increase the minimum wage, make sure that we have a mortgage market that works for everybody, an education finance system that works for everybody, access to jobs through public transit, family leave policy, childcare — there are lots of things that we could do in the short run that would alleviate the problem. And then of course over the long run, we have to do something about the intergenerational transmission of advantage, particularly the education system.




BI: What about the current president? How do you think he’s fared with the economy?

JS: I think that there have been moments when he said the right thing, like when he said he was going to devote the last three years of his terms to create a more equal society. Unfortunately, he didn’t execute. And if I look over the eight years, he’s done one thing that was very important — that was ObamaCare extending access to healthcare. Not as much as he wanted and not as much as most progressives wanted but he did. I think the way he structured the recovery — the bailouts, for instance — led to a recovery where 91 percent of the gains went to the top 1 percent. That’s a failure. The trade agreement that he is pushing now will create more inequality. What worries me is that — I don’t want to say that he is the architect — he’s actively been pushing policies that I think are pro-inequality.



Read more: http://uk.businessinsider.com/nobel-laureate-joseph-stiglitz-2015-4?r=US#ixzz3dM4UDcBH