Joseph Stiglitz: It’s Time to Get Radical on Inequality

America’s economic system has failed by not raising living standards for most.
Nobel laureate Stiglitz, author of The Price of Inequality and The Great Divide, studies the forces driving inequality and what is at stake if it continues. In his view, bad economic thinking deserves part of the blame - fanciful ideas like trickle-down and the notion that economists should try to increase the size of the economic pie and let the politicians worry about distribution. On the contrary, Stiglitz sees distribution as a problem economists must confront. He warns that an economic system that doesn’t raise standards of living for most Americans is a failure.
Stiglitz departs from Thomas Piketty on the causes of inequality and sees capital gains on land and rents associated with monopoly power, discrimination, and exploitation as the big story. He also faults deregulation in the banking industry.
Stiglitz warns that inequality and unfairness are undermining our identity as Americans, destroying our society, and harming the economy. It’s time, he says, to get radical. We have to understand that mild tweaking won’t work and that we must take on the underlying and power structures if we hope to tackle this enormous challenge. Watch the video to learn more about how to do this.

[@velayuthman]

Given the pace at which things are spinning out of control, within a few short months we may find ourselves in the middle of a deep recession, a stock market meltdown, and a housing crash that'll be unlike anything we've ever seen. All signs suggest that 2023 will be a year of severe economic pain all over the nation. what moves can we make to generate more income because I can’t afford to see my savings of about $320k turn to dust

[@DanLeahfort]

Good question.. millions of families are already having to skip meals and take on debt to cover their basic necessities. Another dark winter is about to begin and it looks like it’s all downhill from here, soon our society will have an overabundance of people reaching their senior years without the ability to fully provide for themselves.

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[@TeresaBrickle]

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[@liambracey6708]

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[@TeresaBrickle]

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[@longnewton1]

The idea that it’s the economists role to “make the pie” as big as possible and others responsibility to distribute it, is floored thinking. It takes no account of negative externalities and the need to limit the size of the pie in order to protect the environment and limited resources. Climate change and biodiversity loss have proven this issue is real and it’s time that economists started to include this in their theories. Also, capitalism by it’s nature will lead to increasing inequality as as productivity gains become more difficult, holding down wages becomes the main and ongoing focus driving income and wealth inequality.

[@ferabra8939]

Essentially he's saying the same as Piketty. No matter where the rents come from, monopoly, land, ...the gap between the returns on capital and growth will become bigger, and consequently inequality will become bigger.

[@smartiepancake]

+Fer Abra Yes and no - Piketty obscures the very simply policy change that would change everything - LVT.

[@SchrodingersCat8813]

+Fer Abra That is true, but while I can't vouch for Stiglitz I personally found Piketty's theory a bit of a cop out, he just ends with "We could tax global wealth at 2%" but admits it's unrealistic. Kind of a lame finale to the big work, while Stiglitz seems to take a bigger swing at the issue.

[@ferabra8939]

Brian Lopez He says it's unrealistic on a global scale, but goes on to say that it's realistic and frankly a must in Europe. Lame finale? he says it's either that or a revolution. He can't be more clear, supporting every conclusion with tons of data. What's lame about that?

[@pigofapilot1]

+Fer Abra Democracy is the only peaceful vehicle of change that I am aware of. In the EU the president is not democratically elected (there is no vote by the population) and this is a very alarming development. The top positions are by appointment by a largely faceless elite. Can you imagine this situation developing in the USA? The system of EU government in operation showed up clearly during the Greece crisis and has clearly become a plutocracy. The status quo suits them (the elite) very well. Democracy is dying in th EU in favour of a Scrooge and Cratchett style economics (austerity). Be warned.

[@ferabra8939]

pigofapilot1 I agree. More democracy in EU is the only way. That means first and foremost a Parlament with democratically elected representatives who decide on the EU budget. Actually that should have been established together with the common currency which as it is only benefits Germany. But if that doesn't happen, how long do you think Greece or Spain will endure non-democratic imposed austerity? Not very long.

[@jdanon4103]

Well yes... i remember in 2008 when the whole crisis thing went down. Every morning i went to school (commerce/economics) and expected to see the bankers hang and burn-, or at least being beaten and shamed in the streets (i'm from a major banking city in a major banking country that poured A LOT of money into "their" banks), or at the very least being nationalised and potentially tried in court, but nothing ever happened. I'm still not sure, 10 years later, if people even know what happened, that they've been robbed and lied to by their own government. That in essence, they are still the same pawns they have been since the dawn of civilisation, only with iPhones and car loans now. And even more so, it's incredible that now there's all this austerity being imposed on people all over the world while the financial industry received the largest welfare checks in human history... even after they stole the peoples assets and money and land and nearly crashed the whole goddamn system, and the middle class is left to deal with increasing rents, stressful jobs and burnout and fucking fear of being evicted, of being a "failure" and "not making it". Shame on all of you participants, and shame on us for going along with this s***. I only hope it's not too late to turn this around before we descend into the dark ages once more and leave civilised life behind us, for good. F*** the bankers. History will remember you for what you are you greedy bastards.

[@dmur612]

JD Anon I’m no fan of banks/bankers but... Tell me... Are you aware of ANYONE who was forced against their will by a banker to mortgage their overpriced home?

[@jameslovering9158]

@@dmur612 This age old argument to blame the debtors is shallow, the force of the media and pressure to provide a "home" for your family with ever increasing rents is a huge stress for all to deal with. The home is a sanctuary and security for the family group, its essential to allow a normal functioning life and so the push to do absolutely everything to provide that is paramount. Housing has become a very profitable business for Bankers loaning out more than ever in history with the compliant political class, housing has become financialized, a huge market to be exploited by credit. We don't want this we don't need this, not serving 90% of us its a fraud, the loans are provided from nothing and the few feed off the rents\fees\interest while the larger economy suffers with the weight of the debt. Private Homes should outside speculation, they should be affordable to workers at multiples that are historically seen as acceptable, we fought wars to safeguard our freedoms and rights and now we see a global banking cabal turning us into mortgage slaves. 2 examples close to me Sydney housing mortgage is 12 times the average household salary Auckland housing mortgage is about 11 times average household salary What is the historic average ? its 3.5 The contrived interest rates ( Govt and Bankers set ) was reduced to allow more debt to fuel further the greed and speculation. Interest rates historically were above 8% if that was today most loans would be defaulted as unpayable, in fact, they would consume the entire household income. The financialization happened in the 1980's all based on deregulation allowing bigger banks and more debt. Prior to that our standard of living was so much higher and wealth inequality was much fairer and equitable.

[@dmur612]

James Lovering With all due respect, you didn't read my comment preceding my rhetorical question. To your point, I totally agree that the "wealthy" Federal Reserve and the US Banking system has been colluding with the US Government for too long, at the average Americans' expense. However, my question which has not yet been answered is NO, there was not a single person that was forced or required to accept the terms of their mortgage contract at the price they purchased their home for. In other words, it took complicity and voluntary "greed" of BOTH parties to create the subsequent recession. Moreover, Blaming greed and "the wealthy" on the recent economic calamity is like blaming plane crashes on gravity. Greed or greedy people HAS AND WILL ALWAYS EXIST. The question(s) that must be asked are "What actions facilitated and enabled the greed we saw?" and "What is the most effective means of mitigating greed and plunder?" I would argue the FEDs long term low interest rates, the political classes interest in a burgeoning economic market coupled with the growing interest of home ownership despite the increased associated risks ALL contributed to the recession.

[@jameslovering9158]

@@dmur612 This issue never went away, the debt kept climbing and today its caused "populism" due to the inequality and dispossessed middle-class. Global finance is at the root of all this having created the largest wealth inequality gap in over 100 years. 1."What facilitated and enabled the greed we saw" Where this all started IMHO was in the "deregulation" of finance with Reagan and Thatcher, this single act started the change in banking and allowed the creation of credit and derivatives into global TBTF banks. Bubbles have always existed as with greed, what we have this time though is a global orchestrated network of banks working to extend credit in mortgages at rates never seen before, it was never possible before due to regulation and limits in what banks could lend for private housing. Derivatives enabled the fraud, banks on selling mortgages to investors globally, the fraud in this was astonishing in that Govt, Rating Agencies, Global Banks, Insurance Agencies all colluding to defraud investors. Here in Australia, we have seen a "Royal Commission on Banking" and this has uncovered some nasty entrenched policy and practice that's caused quite a storm. This is the key root cause, "The financialization of our economy" and the corruption of our political system. Please do not sidetrack the issue around personal greed of some of the population, "Nobody forced you to buy those cigarettes that gave you cancer", if we know its harmful we have a duty to warn and not abuse a position? 2. "What is the most effective means of mitigating greed and plunder?" In this case, we can see this is due to the unregulated mechanisms of bankers to create mortgage debts, we already had the regulation that minimized bank failure do to excessive lending. We now have extreme levels of debt everywhere ( Corporate, Government, Student, Auto Loans, Housing ), all taking from the future. Politicians capitulated to the donors and changed the laws, how can we stop the corruption of our political class? Your point about "complicity voluntary greed" of the public in the housing market. We cannot compare the greed of a home buyer hoping the family home appreciates so they can have an appreciating asset over time, against a banker who is knowingly bending rules to lend to those in risk profiles that should have raised alarms. The greed here is Govt, Finance colluding to personally profit while transferring wealth in the wider economy. The revolving door, senior government treasury positions & TBTF banks.

[@TigrisVoice]

@@dmur612 Does anybody force you to go to work to earn your life?

[@rikkoshop620]

Even economists are afraid of the middle class. The one option that Joseph never mentioned is employing a specific option that supports channelling a remittance to the middle class (the social contract - hear that Republicans.) He spoke of efficiency and investments of the elites but how they have no clue about how to implement that social contract. But he did say no spending means no economy, and the inequality that, that will breed is the existential threat !!!

[@SchrodingersCat8813]

The best mainstream economist, hands down. It was before my time, but I do wonder what, if anything, he and Krugman said during the 90s when inequality was really taking off, good numbers of the economy were still being left behind, deregulation of finance and what not. Maybe he did speak out against it, but yeah...shocking to see an Ivy League Nobel Prize winner say the things he does, really taking a hammer to mainstream econ, and our memes on the wealthy. Granted, I think most of us know the wealthy save a lot, and spend on goods that don't really benefit the US terribly much, but still good to hear.

[@jefflittle8913]

He has been here all along. Back during Occupy Wall Street he was the source of the famous "inequality bridge" image.

[@DucksDeLucks]

Today's minimum wage of $7.25 or so is lower after adjustment than the 1956 minimum wage of a dollar an hour!

[@dickhamilton3517]

break a leg, Sergio - you really are an idiot.

[@jameslovering9158]

@Sergio Aguirre Sounds like you need better education if you cannot comprehend the issue.

[@jameslovering9158]

@Sergio Aguirre More weakness in your comments, you turn to personal insult as a defense.

[@MrJackPeppers]

@Sergio Aguirre Value is relative. Hard to measure. Get better skills? Is value to society related to skills or usefulness? What about garbage collectors? They are essential to society. Why not get paid more? Because anyone can do it? I guess so. Unlike some specialized scientist. Yet don't we as a society have the moral obligation to give everyone who works for society at least a decent living? I don't mind a system where people get more resources based on skills and usefulness to society. Seems fair. But is it fair having people who work not afford a basic living? To have a roof and food guaranteed and education and health care for them? We evolve. If we have that capability why not share it? Specially with those who despite working several jobs, remain poor... We have the obligation to do better and get skills to help out but we also have the right to a decent living if that is possible. Which it is.

[@promitkar1528]

@Sergio Aguirre Never go full dumbass on the internet kid.

[@MartinScreeton]

What Happens when we get all of the information... We quit, we do not feed the machine anymore, we quit participating in the rip off.

[@winstonsmith6204]

It's like MGTOW. Or Herbivore men in Japan.

[@NEMO-NEMO]

Unfortunately Solidarity has never been a strong vein in the history of America. It’s always been a “grab-and-go” society, from the moment HH came around the Hudson River 1634..

[@ihmemaa852]

I find it fascinating that the US is recreating exactly the situation in society that their forefathers (and mothers) were running from. The only difference is that belonging to the "upper crust" does not depend on "being noble", but just on how much money you have. But other than that the situation reminds me of Europe between the 14th and 19th century. Lot's of disadvantaged, poor people and a very few at the top. And almost no chance to make it up there for the average people. And I would be curious to know his suggestions on how to take on the underlying and power structures.

[@mikolowiskamikolowiska4993]

Got the same chance then and now. But majority too lazy to do the work.

[@jackbeagle8458]

@@mikolowiskamikolowiska4993 you must be either retarded intellectually or spiritually malevolent , either way, not good.

[@mikolowiskamikolowiska4993]

@@jackbeagle8458 and you are beacon of intelligence with your ad hominem aren't you. Like I said Too lazy to even makeup coherent statement That's how we know the victim Olympians Dolt

[@jackbeagle8458]

@@mikolowiskamikolowiska4993 I’m affluent so no offense taken, but your ideas will lead to the further suffering of people like yourself.

[@suehonsl4718]

I agree with Mr. Stiglitz's analysis of the problem and with his notion that it's time to get radical. I am very disappointed in his discussion of what needs to be done. As Arlin said in an earlier comment Mr. Stiglitz's analysis is based on the ideas of Henry George. So why does he not also present Mr. George's solution, which would be extremely simple and yet fix most of the problem. This is a tax shift off of labour and investment in actual production onto the "rent" ie annualized value of land and natural resources. No-one would be taxed on income based on making stuff or providing services. Companies would have to invest in actually doing their job as capitalists - you know - purchasing or leasing physical capital and hiring labour to provide goods and services.They could not get rich speculating in land values and made-up financial instruments.

[@quantumada]

thank you for posting this....

[@longnewton1]

We do need more radical solutions. I could start by Government’s accepting that their role is to represent everyone, not just the rich. As the video says, trickle down never was a real proven thing, it just justified the rich taking the wealth.

[@danielhutchinson6604]

So the idea of Economics is simply to feed the Economists? Is the illusion of Money as a measure of Value, an illusion? Can Man continue to exist using the worship of Money as a religious faith?

[@NEMO-NEMO]

How do you make government accept their role?

[@tuckerbugeater]

@@danielhutchinson6604 Drinking kool aide is much easier.

[@danielhutchinson6604]

@@tuckerbugeater Your response demonstrates a remarkable lack of interest and even less thought? Try again?

[@jamesbuchanan3888]

Bottom up or top down ... Both mindsets are identical in that a few elites get to choose who gets to have what resources. At the end I laughed because he failed to note how inflation creates a powerful arbitrage opportunity for those who are already wealthy. ... Buy on borrowed money at the prices of today, then pay the loan with the higher rents and devalued money of tomorrow. This structural aspect of inflation (Cantillon effect) exacerbates income inequality.

[@nightoftheworld]

12:00 "If you look at the productivity of the _real_ American workers, it's doubled-and the wages have stagnated. So a gap has opened up and you have to explain that. _That_ in my mind is what I call "rents/exploitation", it's taking advantage-it's the rules of the game. And this is really the point: _It's not about capitalism in the 21st century, it's the way we've changed the rules of the game to disadvantage ordinary people."_

[@IanPunter]

all that massive wealth from increased productivity goes into the stock market mechanism (the stock market multiple) and disproportionately into the pockets of the wealthy (the wealthier you are the more you benefit)

[@garyward5002]

This has kept inflation in check for the last 40 years. Now that a shortage of labor is driving real wages up, we have more inflation. Either we live with the inflation and have real wages go up, or we go back to losing more and more ground and have real wages continue to fall. Either of these is more likely than lowering the return on unproductive capital without social revolution.

[@Orf]

15:00 you can't have an economy if people have no money to spend.

[@mitchclark1532]

Very good, important analysis!

[@stephenyang2844]

We are seeing the signs of stagnation and social discontent dividing our country by extreme inequality. Prof. Stiglitz's message needs to be told to politicians to preserve its 'exceptionalism'.

[@satish7919]

Request INET to interview renowned Indian economist prabath patnaik in helping us to understand more about inequality and economic model. Thank you.

[@InnerSunshine]

This supports AOC's Green New Deal beautifully. Stiglitz says here he believes minor changes can no longer be enuf, the power structure must be addressed directly to address toxic inequality.

[@antoniocope5877]

A part of what he is said was told many times before by those who think unbriddled capitalism is a mortal sin.

[@thomasdagley]

I always enjoy how absolutely beautiful the places are that they use to discuss inequality.

[@brooksworkman7632]

Yang and Bernie 2020. It's ONLY a start, but the best shot we have without full out revolution/collapse.

[@itskashkashi]

@Amy S. idk, bernie squandered the opportunity to have any impact... and hes out here pushing biden ENTHUSIASTICLY.

[@mitchclark1532]

@@itskashkashi Yang endorsed Biden while Bernie was still in the race! They're both guilty to some degree.

[@garyward5002]

That would not have changed a thing.

[@davidkaser7423]

What America is in the process of now is Americans are sick of not getting wages equal to their skills. When people can not pay basics of living with highly skilled trade skills, they quit working. When government gives corporations the right to move to another country to produce their products leaving skilled Americans without work, again Americans quit working. Wages make Americans stop working. How to fix it ? 1. start making products Americans need in America again. Put skilled Americans back to work. Stop bringing in millions of people from all over the world when American workers do not have jobs, or have jobs that do not match their skills. I know this first hand, a highly skilled code welder with 30 years experience making almost the same wage as a new just out of school welder. In 2008 I said enough of the very low wages and got out. Since then I do not work, just like millions of other skilled Americans. No benefits, low wages, no good outlook for improving ones life situation is the problem.

[@karinetyrrell1402]

We are ruled by those who have never had "to do without." Our privileged ruling class has not experienced scarcity and limits at an early age. The evils of the present system follows from that.

[@oldreprobate2748]

Something that's overlooked in all these economics videos is the effect that the Lewis Powell Memo adherence by Reagan to today has had on equitable and ethical economics.

[@arlindelacruz9639]

Dr. Stiglitz's emphasis on land is nothing new. Henry George has tackled the issue already, however, Stiglitz is correct in that it is a big issue now more then ever.

[@pranavmanie1479]

Stiglitz actually calls himself a Georgist :)

[@AdolfStalin]

problem is, social equality will never happen. economic equality is plausible though.

[@Orf]

16:20 it is time to get radical...inequality has reached a stage where mild tweaking is not going to work.

[@mitchclark1532]

Capitalism has to end ASAP

[@mitchwilson1969]

And ... here we are in 2020.

[@sambdb2099]

Thank you

[@theseustoo]

Funny that Stiglitz says that talking about 'distribution' was taboo among economists... In ancient China a certain philosopher named Confucius once said, "The Chun-tze (i.e. 'Gentleman' or 'Superior man'... read: 'administrator') does not worry about population, but about distribution..." There's a reason that the Chinese refer to Confucius as 'The Master'. (Or used to, anyway!)

[@stoicllc2352]

Essentially these "rents" have undermined the American workers ability to consume and therefore weakened the overall economy.

[@mitchclark1532]

As long as we get our crumbs, they'll think we're ok

[@TomekSamcik69]

All these "resources/monopoly rents" should be heavily taxed to prevent capital from being misallocated there that's a subject for another Nobel prize.

[@philgwellington6036]

This is brilliant impression of Stiglitz by Ricky Gervais. Lol

[@misturashittuNiyas3094]

Very concise

[@justinlinnane8043]

we're all screwed !!!

[@jeanlouisgold6473]

“economic facts and fallacies” of Thomas sowell dismantle stigliz arguments

[@nebulosa4347]

I wish he had defined radical. Just saying "radical" is too meaningless. 3:29 "Make the economy bigger, everybody will benefit." How is taking money away from the government and letting the 1% keep it making the economy bigger? The government is a consumer, it pays for goods and services, it generates jobs. The 1% puts that extra money in the bank, to sit in an account, producing more money. It's not generating jobs. Lowering taxes on the 1% is making the pie smaller, not bigger.

[@AMan-rg4en]

Simply there is no equal access to political power. Productivity may have doubled , yet the capitalist will ascribe it to automation. The worker happens to be present but that will change with AI. Needed is a levy on productivity relative to a baseline. Why are wages stagnant? There is no respect for workers is why. Capital respects only capital and raw political power. Levy on productivity counter to growing the pie? No. Might we expect that this levy would yield contributions to Social Security for instance and unemployment insurance. Currently automation is written off and we subsidize it. Monopoly seeks to continue. He who ‘founded’ Microsoft is currently buying farm land. Also busy peddling prescription drugs. Why? Rents eternal is why.

[@intlprofs]

5 Years Ago!

[@alloomis1635]

get democracy. dispersed power will result in widespread wealth. just as concentrated power sustains concentrated wealth.

[@antediluvianatheist5262]

Need both. Without dispersed wealth, the wealthy can buy democracy. Need to expropriate the wealth, insert rules to prevent it recurring, and ALSO have democracy.

[@antediluvianatheist5262]

@Tarzan Nope. Did you miss the 'power' part of things?

[@jayaramj8497]

Need to disperse wealth and education plays a big part in democracy. A democracy run by fools is worse than an autocracy.

[@TheBalancedAmerican]

The wage and productivity gap has always baffled me for the fact that productivity is measured by the amount of goods and services produced per labor hour. If productivity continues to rise, that means we are producing more goods and services that are being consumed by _someone_. The first inclination is to assume that stagnant wages are actually consuming more goods and services than they use to, which i believe has happened to a degree, but still seems like a narrow explanation. Another reason is that productivity and labor detached with the advance of computer science, so many productivity gains not related to labor utilization. One reason that I believe is under-recognized is that many people who are consuming are not earning wages, and this is also part of the equation. Social Security and Medicare consumption are not related to wages, yet consume a lot of productivity. The declining worker/beneficiary ratio is part of this phenomenon. But even when transfers are included there is still a 10-15% gap between wages and productivity. Certainly income inequality is also a big part of it. But my question is, since the wealthy invest, rather than consume, and worker wages have been fairly stagnant, who is consuming all the extra goods and services? They have to go somewhere, right? =/

[@Howsonify]

Wayne Vernon I think the problem begins with your definition of productivity. Productivity, at least how mainstream economics defines it, is simply efficiency. Productivity allows the same amount of labor and capital to produce more output, but it also means that the current amount of output can be produced with less labor and/or capital. Hence, *productivity also means less, less inputs needed.* Another minor problem is your assumption that what is produced is necessarily consumed. It's not always the case that supply equals demand, at least in the short/medium-run That said, the question is still valid, as output/expenditures are clearly increasing and real wages have stagnated. Here's a few explanations that immediately come to mind: 1) Consumption is being supported by increasing levels of borrowing. People are financing current levels of consumption by spending their future incomes. 2) Some of our output is consumed by more and more foreigners who now have access to our goods and services markets, and this consumption will increase as their own incomes rise. 3) Consumption is not only a function of income but also of "autonomous consumption". Transfers (S.S as you pointed out) are part of autonomous consumption but so are endowments and wealth. A person is wealthier if the value of their assets/investments increases, which tends to induce higher levels of consumption. So the average worker may face stagnate wages but is wealthier because the value of their house has increased.

[@TheBalancedAmerican]

Jeremy Howson _" Consumption is being supported by increasing levels of borrowing"_ This was certainly true in the period leading up to the financial collapse, but since then, households have had a net deleverage. While this explanation is a possible cause, it seems less significant in very recent times. _"Some of our output is consumed by more and more foreigners"_ This doesn't seem to be a likely cause, since the US runs a foreign trade deficit. Far more US incomes are spent on foreign goods than foreign incomes on domestic goods. Not only do US (and some foreign) incomes consume the entire productive output of the US, but also a large part of foreign output as well. _"Transfers (S.S as you pointed out) are part of autonomous consumption but so are endowments and wealth"_ This is the elephant-in-the-room that I believe is under-represented in mainstream explanations of the gap. The productivity gap ranges from 40-50% when earned income is the only consideration, but narrows to 10-15% when transfers are included. So, of all explanations, this seems to be the major contributor. I believe the remaining difference can be attributed to all-of-the-above reasons you (and others) offer, especially unearned-income from returns on investment (primarily pension and household retirement funds, since retirees would use the income to consume ,rather than roll-over the investment). What is startling to me is that, what seems to be the primary cause (transfers), is almost entirely overlooked by the majority of mainstream economists. Perhaps even more startling is the common prescriptions to double-down on transfers and public assistance to _fix_ the problem. =/ Personally, I think we've gotten a fairly good deal from many entitlement programs. Soc. Sec. and Medicare have reduced elder poverty rates from nearly 35% in 1960 to less than 10% today. However, it should not surprise anyone that systems of transfers would come with long-run costs. I am however, always looking for a different explanation. Very good response, thank you! =)

[@daveruda]

I Think the households are borrowing again. Its certainly true in the nothers countries in Europé that had some growth.

[@TheBalancedAmerican]

+daveruda For the US, household debt/gdp seems to have stabilized - primarily because of housing finance, which is up over 5% y-o-y. research.stlouisfed.org/fred2/series/HDTGPDUSQ163N research.stlouisfed.org/fred2/series/MDOAH The acceleration of debt is increasing, although only just recently. But with the private sector leveraged at around 80%/GDP, there isn't a ton of room to expand credit before incomes become a problem again. Compare that to a post WWII scenario where the private sector was leveraged at only 30%/gdp. =/ There are still deleveraging pressures, and the small growth the US has been able to carve out is fragile. We need inflation to aide private deleverage, but that would requirement good government policy (not likely). =/ However, this thread is a discussion about the gap between wages and productivity. In my opinion, when you have growing entitlement spending, and an aging demographic, it is predictable that wages would decouple from productivity. There are other reasons as well, inequality obviously, but I believe this is the primary reason. Interestingly, it is hardly ever mentioned. Except here: www.resolutionfoundation.org/wp-content/uploads/2014/08/Decoupling-of-wages-and-productivity.pdf Economics is only a hobby for me, so I am open to discovering errors, if i'm misunderstanding something? =)

[@theseustoo]

So... I'd just like to ask Joseph Stiglitz, WHO should 'get radical' on inequality... and exactly how does he imagine them going about it? As the rich get richer, the poor have less and less power... :/

[@pamelahall857]

Distribution would prevent a bubble ?

[@jackbeagle8458]

Seven years later nothing has changed.

[@garyward5002]

Hundreds/thousands of years later, nothing has change. There really is nothing new here.

[@Herbwise]

At about 10 minutes he says the public bails out the banksters imply that it is via taxpayers. That is simply not true. Sovereign currency-issuing nations do not need nor use taxes to fund their programmes of the needs of citizens.

[@NoExitLoveNow]

Trickle down economics was always an apologetic of the right. No one else really thought it was a good idea.

[@dickhamilton3517]

Wrong. The phrase comes from Friedman. I watched and heard him say it.

[@dickhamilton3517]

he didn't define it because it's not a definition - it's a phrase that sums up what he was saying immediately before in the interview. He coined it. And he believed it would happen as a consequence of the system of economics he was advocating. It was the early 1980s and he was being interviewed in UK, on BBC.

[@dickhamilton3517]

now you're raving. Trickle down is a very narrow idea. People where you are may use the phrase in the way you describe, but, as is often the case, they are wrong. what has all the rest of your nonsense got to do with it?

[@dickhamilton3517]

I've already said 'trickle-down' was but a phrase he used to sum up what he had to say. Don't you understand English? Obviously not. Amd obviously not again for the next part. Your nonsense is all the shit that followed, that had nothing at all to do with the question at hand. Now bugger off.

[@kiwitrainguy]

The clue is in the name: Trickle down, it's not Flood down or Deluge down. It's just a few crumbs that happen to fall off the table that the rich are eating at.

[@isaacdarche7103]

Our economic system is a failed system. Change the system to benefit regular people. Enough is enough.

[@itslene]

Regular people have benefitted from this sytem since the 19th century.

[@RynoLeGrange]

Okay I will change it. Enjoy playing the guitar.

[@TigrisVoice]

Isaac, you are such a commie.

[@hollywoodlibertarian4227]

Excellent point that a lot of ill gotten wealth has been created by capital gains. (Mitt Romney pays 15% etc) Would you be in favor of a capital gains increase? Bill Gates recently said that's what you need to do to hit the wealthy.

[@kennethisaac233]

He said that?

[@vivalaleta]

Has NET ever had Professor Richard Wolff on as a guest?

[@david8157]

One of the points Stiglitz seems to miss IMO is that the economy is not really one pie anymore. Today we have a two-pie economy (2π). The real economy of production and services, and the virtual economy of speculation. The gross size of both combined is bigger than prior to the virtual economy bubbles... But the size of the real economy - the one we all live in - has and is shrinking. (consult the Baltic Dry Index if you doubt me) More and more of the wealth generated by the real productive economy is being extracted by the derivatives and other criminal instruments designed for that purpose by the financial sector. Unless derivatives are outlawed and the financial sector heavily regulated there cannot be and will not be a recovery. This of course will not happen, so we can expect a catastrophic collapse at some time in the next months or years.

[@SomeOne1121]

+David Walsh True, the size of the financial sector has grown from just a few percent of BNP to over a dozen and sometimes a lot more, as a part of GDP, in most western countries. With that said, I have toyed with the thought of how to outlaw or regulate the derivatives market...it seems really hard because it's like outlawing gambling. Yes, you can prevent people from opening public casinos but we all know that for the avid gambler, there's always a den somewhere.

[@david8157]

SomeOne1121 The problem of derivatives is at the root of the crisis we are now in. Most should be outlawed; and those which are legitimate should be regulated appropriately. Humans will always engage in crime; but this is no pretext for having no laws.

[@SomeOne1121]

+David Walsh I agree :) I think we need a new generation of politicians and economist to make the necessary changes to so many of our systems.

[@david8157]

SomeOne1121 Yes indeed; politicians who represent the general population and not the financial elites I think for now things will probably have to get worse before they can get better

[@SomeOne1121]

+David Walsh in other words, vote 4 trump?

[@sifridbassoon]

right Joe, i'll donate right after you

[@smartiepancake]

In other words, Henry George was right.

[@BenJamin-rt7ui]

+D Bruce Stiglitz is almost there, but not quite.

[@ScottishLibertyPodcast]

capital is not growing at the expense of the rest, it's growing out of service to the rest.

[@soapbxprod]

Precisely! Capitalism is based on voluntary exchange and mutual self-benefit. :)

[@Bass_pn]

it's high time. 7ys ago.

[@Sweet69]

Lowest wage hasn’t increased in a 1/2 of century ? So an undocumented laborer cost 150.00 a day in 1968? Rents are monopoly ? And a natural resource taken by some ? I’m a blue collar guy who didn’t go to collage , you can make it in the US still if you are frugal and work hard and reinvest. Don’t take literature or fine art as a major. I agree there is a $ flow to the top but you can’t blame everything on it. There’s some personal responsibility needed..

[@Newlinjim]

Jack Kabibble if everyone did that consumption would cease. The powers that be want consumers, Americans are spoon-fed this mantra from birth, emerging markets depend on our consumption for most of their GDP. Income inequality will and is creating a downward spiral globally.

[@Mmoselle1983]

Newlinjim Exactly! Jack is probably a republican who still believes the shit Trump barfs out of his shithole and couldn’t possibly comprehend what you’re saying though because his head is stuck in that 50s good ol boy thinking that hard work will just conquer.

[@pjamesbda]

oh...the subject of inequality is a "hot" topic. This interviewer is a bird brain! Joe seems very calm for having the insight he's supposed to have. This system is burning to the ground, and meanwhile he's telling us about how it's unfolding. What a great thing ...now we know we are being plundered. Big news flash.

[@soapbxprod]

Joseph Stiglitz is a fraud and an incompetent. Someone who's never produced anything of any value to anyone else in his entire life. And a liar. For him to say that the Clinton years were a "boom"? Come on! He collapsed the entire world economy more than once. He's married to a woman 17 years his junior, a classmate of mine at Ethical Culture Fieldston and Reed College. What a total jackass. The Greeks cut metal into the first coins? AHAHAHA! And as to his reading of Adam Smith... Oh please! EVERYONE was poor in 1776! Poverty was the natural condition of mankind. It was science and technology that made people prosperous. He actually decries their "detachment" from agriculture? MANUAL agriculture? This is too ludicrous to go on... I need 500 pages to refute him. Never mind... read the Wiki page: en.wikipedia.org/wiki/Joseph_Stiglitz

[@thoughtsurferzone5012]

Time to give everyone an electric car.

[@Mmoselle1983]

So my question to Stiglitz would be, how do you save if there is nothing to save? For the average citizen, if wages have declined and stayed stagnant, what the fuck is there to save? Even if you have stripped yourself of nothing but essentials, again, what the fuck is there to save? 🤷🏻‍♂️

[@daviddestin1990]

"inequality" is bad , the real problem is POVERTY

[@mitchclark1532]

They're both part of the same systemic problem--wealthy people control the economy and they use that power to exploit everyone else for more profit, increasing their slice of the pie while the rest of our slices get smaller and smaller. Poverty is what happens when there's extreme inequality. The root of the problem is capitalism itself.

[@coopsnz1]

@@mitchclark1532 the government steal more of your money not capitalusm , im tax 50% - 80% in Australia

[@qinby1182]

Only way to really solve this is solving Democracy. To solve Democracy you need a educated electorate. I think most people want the same thing but vote for slogans. If a more scientific approach to politics i.e. not slogans but policy. We do have a lot of data on what works and what happens. Polititians should state their goals and their method then we do have a discussion. No political party can win by the slogan "let screw the majority"

[@williamforrestall2161]

Oh My 'inequality" ... what a problem ....The horror of "Inequality" , Height Inequality, Life Span Inequality, Weight Inequality, IQ Inequality, Health Inequality, Good Looks inequality, Emotional health Inequality, Cultural Inequality, Eye Color Inequality- what horror .... Good thing these people are addressing such a critical matter as inequality lol .... what foolishness ...or id this more of the toxic politics based in old fashion envy politics - ????

[@rwoz]

"If you deregulate, if you change the rules of the game so that you get bailed out", why the hell does he put the act of the state bailing a bank out in the category of deregulation? A bailout has nothing to do with deregulation.

[@soapbxprod]

Because he's a Statist...

[@ScottishLibertyPodcast]

Where I agree with Stiglitz I think is he seems to favour a land value tax which I think it probably the best or least worst tax - the idea was first formulated by Henry George - and his reasons are that this stuff is given from the earth it's not a product of peoples work so they could pay the community for use of it I think this would be the fairest way to reduce inequality without harming businesses - however I would like to replace ALL taxes with the LVT

[@soapbxprod]

But what about John Locke's Terra Nullis concept of land not being private property until individuals add their labor to it?

[@JAC82]

Yes, but remember that Locke also had his Proviso, which states explicitly that his concept is only valid "at least where there is enough, and as good, left in common for others". So if you like Locke's conception of property, remember that he also understood land could not be monopolized without dangerous effects for liberty.

[@soapbxprod]

Andrew Carroll: "Locke's Proviso" is Nozick's term, not Locke's... "Regarding 'Locke’s proviso' that in the original acquisition of natural resources there should be 'enough and as good left in common for others', Nozick claimed that this 'is meant to ensure that the situation of others is not worsened.' According to Nozick (p. 175) , 'The crucial question is whether appropriation of an unowned object worsens the situation of others.' But this isn’t what Locke said, and the Lockean proviso doesn’t require that original claims to private property in natural resources should not “worsen” the condition of anyone else. Suppose that Jack and Jill desire to cultivate the same plot of land and thereby claim exclusive ownership, but that Jack gets to that plot first and homesteads it before Jill arrives. If Jill desired that plot of land but was too late to establish title to it then she might regard her situation as “worsened” by Jack’s prior claim, but this is not what Locke had in mind in his proviso. Much of Nozick’s subsequent discussion of some implications of the 'worsening' proviso therefore has little relevance to Locke’s theory. The standard that the condition of others should not be worsened by one’s appropriation of natural resources is highly subjective, whereas Locke’s proviso was reasonably objective."www.libertarianism.org/columns/john-locke-some-problems-lockes-theory-private-property

[@soapbxprod]

Andrew Carroll: Locke's complete paragraph is as follows: "Though the Earth, and all inferior Creatures be common to all Men, yet every Man has a Property in his own Person. This no Body has any Right to but himself. The Labour of his Body, and the Work of his Hands, we may say are properly his. Whatsoever then he removes out of the State that Nature hath provided, and left it in, he hath mixed his Labour with, and joined to it something that is his own, and thereby makes it his Property. It being by him removed from the common state nature placed it, it hath by his labour something annexed to it, that excludes the common right of other Men. For this Labour being the unquestionable Property of the Labourer, no Man but he can have a right to what that is once joined to, at least where there is enough, and as good left in common for others."

[@JAC82]

The point wasn't whose term it is. That's irrelevant. And Jill's situation is certainly worsened if Jack has the land right by the river, or the land on the corner of the busy urban intersection and gets to have his restaurant there. Now Jill has to go down the river to less fertile land, or down the street where less foot traffic will see her business, etc. That is what Locke meant. Land has to be equally accessible to all. The Georgist solution to this moral observation is not to socialize land access, but to reappropriate their capitalized value: rent.

[@felicetanka]

And not even healthcare.

[@Agua-Tex]

To say the 2008 economic collapse was a result of letting the markets self-regulate is simply a fallacy. Government social programs, most notably in regards to housing, helped create the bubble. Essentially, the government created a mess, realized it, allowed the economy to correct itself, and blamed it on lack of government intervention.

[@TeddyCrispin]

Joseph Stiglitz should be the President of the European Central Bank.

[@Gumardee_coins_and_banknotes]

+Teddy Crispin Why not Yanis VAroufakis, he is Greek.

[@TeddyCrispin]

I also agree, this is also a great choice, we need bold people thinking "out of the box" to preside over the European Central Bank.

[@dickhamilton3517]

yes, Joe, but to do it, you won't be able to preserve the current incarnation of Capitalism, called Neoliberalism or Neoclassical Economics, and no amount of tinkering at the margins to try to ameliorate its worst effects will do the trick - even if the rich will allow you to (which they won't). This has to end. As a stopgap, we could temporarily go back to something like Keynesianism until we we can think of something better, because Keynesianism gave us full employment, high growth, and high income growth in the middle range, but the rich will resist strongly (as it also gave us high marginal tax rates at the top). They have done spectacularly well under Hayek's realisation of neoliberalism ( a.k.a. Thatcherism or Reaganomics), and are not going to give it up without a fight.

[@michaelsamuel7365]

A direct approach must be taken to address inequality. Trickle-down simply isn't addressing the problem. See my version of a basic income payment - poverty eradication worldwide/michael samuel - on youtube.

[@mechanicjobs]

I fucking pissed.

[@davidfoxrn]

A rich person will be willing to give up wealth in order to gain political power.

[@aten1123]

There is an overestimation of the role of economists in society. Most of the capital created in the markets today is not driven by Economists, but by Entrepreneurs, Financiers(some Economists work here too) and other market forces. Economists are just good at looking at trends and making predictions(Financiers) and correlations(Academicians and policy makers). As Thomas Sowell says "Correlation doesn't equal causation", the fact that economists can best articulate these "correlations" doesn't mean they can do something about except by using the hammer of Uncle sam(macro economic policy); other than that they're just glorified "historians" in a sense. So Stiglitz's idea that it's the role of "Economists" to make the pie as large as possible is delusional and self aggrandizing.

[@kiwitrainguy]

Except that it wasn't his idea about increasing the size of the pie. He was explaining the economic philosophy of the early 80s.

[@unleashedrider4309]

Its bc the fed period.

[@asleytamkei7507]

What is the poverty level? Different definition in different parts of the world? The % of population being poor always in the minority ,,, therefore the majority of the population (being wealthy) will be the determinant factor in the outcome of this so free market economy? Government of the people has and must have a say in the distribution of wealth within the or a country. Conflict between haves and not haves still lives on today! French revolution of the past may repeat itself, some where.! Rrra..

[@1plus11000]

The MarketWorld is definitely not helping.

[@thefakenewsnetwork8072]

Long live all the leftists worldwide and the progressives

[@Yzbeznyack]

“Stig litz” -hans landa

[@RishikSuri]

May I present the People's Republic of China---millions of people were lifted out of poverty as the "pie got bigger." Obviously, the same model can't be applied to the States but even so.

[@Herbwise]

And then at about the 17:30 mark he talks about the lack of money for investment .

[@datoaronia]

unitec stakes

[@pistolen87]

GEORGISM is the answer.

[@Sweet69]

The goal of Public and all corporations is to be efficient and increase earnings.. labor cost is squeezed due to global competition. Earnings are flat - lower whatever.. labor cost for unskilled or semi skilled will always get squeezed.. business does what’s best for business.. stock price share holders/ ceo That’s why we have flat to no wage increase.. This guy calling rents a monopoly really hit a nerve

[@DaytakTV]

My favorite economist!

[@geoffgriffiths3381]

So how many of the problems highlighted were NOT caused by Reaganomics?

[@antediluvianatheist5262]

Almost none of them.

[@antediluvianatheist5262]

@Spirit Winds And he laid the foundations for all the mess we have now. short term gains, long term losses.

[@floydwilkes9904]

Joe knows.

[@ScottishLibertyPodcast]

I find the whole inequality thing fascinating because it says nothing about how well people are doing, only that some are doing better than others. It doesn't say why they are doing better, it doesn't say if the people who are not doing better are still doing better than they were, it doesn't say if they are even the same people. It's just such a vague notion. Inequality could become less and people could be worse off at the same time, in fact there is more inequality in South Africa when thousands of black people come out of poverty because they are now less equal than the people who are still poor but no one can say it's a bad thing.

[@jackbeagle8458]

If, six years later, you are still alive and reading this, the reason you have no “likes” is because instead of adding an enlightened comment, you chose age old tropes about who is worthy or not, and why having an overclass is optimal.

[@fabiodeoliveiraribeiro1602]

7 years later the problem of economic inequality remains the same. More and more people are getting poorer, desperate and inclined to support fascist adventures while billionaires financially supported by the G7 Central Banks spend oceans of money on space adventures.

[@exhainca]

It's not about could or would, it DID!

[@bethanyhunt2704]

Er, no, it didn't. 100% of the new wealth created since 1980 in America - the whole rise in GDP - has gone to the top 10%. That's not trickling down very much, is it?

[@ofoghladha2110]

it's way past time

[@nnknkable]

Median individual income is up.

[@winsomebrooks1530]

Winsome is like to ask if not get ing some of my money iwas win ing person u all in ge money and better your self the prime minister. U was depen to moist business has done I didn't understand what was going til later ineed some of my money all the net work what come to jamaica my phone Life u have share out to next person from awesome

[@bradleyhenderson1198]

Dude's worth 15 million. What does he know about equality?

[@fancyfree8228]

That makes him middle class 👍👍

[@kuazexin]

Das Kapital

[@Rob-fx2dw]

The misinformation about 'trickle down' is that the whole concept did not benefit people who were in the middle or lower end of incomes. The facts are clearly otherwise and are readily observable to anyone. Just look at what has happened over the last 50 years as a result of increased real wealth in western economies. The lower end of the income earners has benefitted greatly from trickle down. What Stiglitz has grossly misinterpreted or deliberately to account for is the way to ascertain this improvement. Namely he is looking at the comparative dollar earnings of people instead of the wealth increase. Wealth increases can only be measured by taking notice of the full benefit increases of an economy and people in general. Not at their sole comparative dollar earnings. To observe this more accurately you only have to note what has happened . For instance how many people had access to the benefits that the poorer or middle class has today compared to 50 years ago. Namely greatly improved medical services, mobile phones, computers, communications, internet, housing, cheaper better safer travel opportunities, longer life expectancy and a host of other services. These improved services were not even imaginable even to multi millionaires of 50 years ago. Some may say these changes have been made by government but that is incorrect since government cannot do things that the private sector cannot provide. Let us see him or anyone argue against that. No doubt he and others have not. One has to ask 'Why' and the answer is that his argument is inherrently faulted.

[@skyforge118]

Rob Mews You for real?

[@haggeoromero]

+Rob Mews you have failed to make your point. just because people have "greatly improved medical services, mobile phones, computers, communications, internet, housing, cheaper better safer travel opportunities, longer life expectancy and a host of other services. " does not mean that those things trickled down from the rich.

[@Rob-fx2dw]

+haggeo romero Well, where do you think it has come from? Do you think it has come from some racially superior group? Maybe some other group of people? Do you think it has come from socialism? Maybe a national socialist society or marxist socialism. Like the USSR or East Germany or Cuba or Poland or other? Maybe the improvements in technology have caused it ? And who improved that? Governments who kept many improvements like the internet secret out of misplaced fear of people having access to information. That only proliferated afer the private sector got permission to take it over. Governments who confiscated people's savings so the politicians could spend it as they wished. Did government invent the personal computer and release it for millions to use. Or the cell phone, or the multiplicity of software applications? What improved housing did governments make? Did Fannie and Freddie make home ownership better or was it part of the problem? No part of the problem of a bubble in overvalued mortgages. What about improvements in travel ? Did the government make air travel cheaper? Did the government make car travel cheaper? No. What about railroads? Did government build the railroads? No . The fact is that trickle down occurs because business has to recoup their investment and make a better alternative than the existing products for sale to stay in business. If you think government does trickle down you are mistaken. If you are truly of the belief that there has been no trickle down from business then just give up your privately funded and developed goods and services and just rely on government provided goods and services - Just join the long waiting queue. The may have been little trickle down but that is from the government run part of the economy. Why would they since their income does not directly rely on it. Government has no reason to ensure people have more or better goods and services since politicians have virtually no knowledge of what is a better system of operating a business and take no responsibility for failure or loss of expenditure. That is why politicians want exemption from accountability which is an ability to run their budgets in deficits and no fear of prosecution for failure of any sort.

[@skyforge118]

Rob Mews Your funny. Your political system has been subverted to work for the rich. Your politicians are all bought by corporations and billionaires. So your solution is to defend the rich and demean the government. Your delusion runs deep!

[@Rob-fx2dw]

+Sky Forge What about some evidence from you and some illustration of you having used well know principles to make your point. Then you can tell me why there are so called "rich" who they are, and what they do with their money. Do you know who makes these so called 'rich' even richer?

[@1rafa2]

Yes. Let's get radical. Venezuela is the way to go.

[@soapbxprod]

AHAHA! Good one! :)

[@GenerationX1984]

In ancient Rome, the radicals were the people who wished to abolish slavery. In the American Revolutionary War, George Washington was a radical and so was Ben Franklin. Radicals are people with good ideas that people who are afraid of change are unready for. Time to become a radical. Time to change things. People who are afraid of change are no better than animals.

[@GenerationX1984]

The longer you live in a society, the more you accept the shit traditionalism of that society. A 60-year-old ancient Roman would pass out if he saw that slavery has been abolished. But modern technology would scare the shit outta the old geezer from ancient times first. People today aren't ready to abolish high levels of social stratification and inequality yet. It goes against tradition. People would rather live in shitty circumstances than accept change. Change is scary. It was scary to the ancient Romans and it is scary to us.

[@1rafa2]

Chris Nilsson I'm sure Lenin and Stalin would've agreed with you in 1917: "people who are afraid of change are no better than animals". Millions were sacrificed -- like animals -- for the sake of "change".

[@GenerationX1984]

Rafa Abre Without change we would still have slaves and praise monarchs.

[@LuisTorres-mx8fg]

Neo-Feudalism where we take about pie.

[@jamesn2415]

Wow, it proves my theory that the Nobel Prize is not given on ability, but rather, is little more than a political process. This guy is embarrassing.

[@Tyler30ish]

James Nellis Why do you think he's embarrassing?

[@skyforge118]

James Nellis buckle up your seat belt buddy. The pitch forks will come and from your comment i figure you will be on the wrong side...

[@Redactedlllllllllllll]

Capitalism is the best thing ever! We only had to do a little genocide and slavery to make it work!

[@walterburger5281]

Untrue, absolutely untrue!

[@trankt54155]

Speaks like Karl Marx......

[@doko2nd]

How is possible a person that is obviously very intelligent to completely miss the elephant in the room - the increase of the inequality is positively correlated with the increase of government action, especially since 1971. And there is an economic theory out there that completely forecasted those problems, just take a book and read.

[@guesswhotoo6]

Another liberal.