Oct 09, 2015 5:28 PM GMT
A report by Joseph E Stiglitz
The American economy no longer works for most Americans. We pride ourselves on being the land of opportunity and creating the first middle-class society, yet profound and largely overlooked changes have put the middle-class life increasingly out of reach for the majority of Americans. At the same time, we have enabled a small percentage of the
population to take home the lion’s share of economic gains.
The rapidly rising inequality in the United States over the past generation disturbs and baffles economists and politicians because it is unlike anything our economic models predict or our experience of the mid-20th century led us to expect....
What is causing this dysfunction?...
The roots of this dysfunction lie deep in the rules and power dynamics that have prioritized corporate power and short-term gains at the expense of long-term innovation and growth.
The outcomes shaped by these rules and power dynamics do not make the economy stronger; indeed, many make it weaker...
We can rewrite the rules that shape our economy to improve prospects for more Americans while also enhancing economic performance.
The effects of the growth of inequality over the past third of a century won’t be undone overnight, and there are no silver bullets. However, there are policies that can once again put the sought-after but increasingly unattainable middle-class lifestyle within the grasp of most Americans....
Our economy is a large and complex system, and in order to solve the problems with that system, we must aim to fix the economy as a whole. The financial crisis of 2008 and the Great Recession that followed exposed the inadequacy of the old economic models; the new research and thinking that has emerged as a result suggests that equality and economic performance are in fact complementary rather than opposing forces. No more false choices: changing course won’t be easy in the current environment, but we can choose to fix the rules structuring our system. By doing so, we can restore the balance between government, business, and labor to create an economy that works for everyone. Building on the innovative legacy of the New Deal, we must tame the growth of wealth among the top 1 percent and establish rules and institutions that ensure security and opportunity for the middle class.