Nobel-Prize winning economist, Joesph Stiglitz, has an article in Politico today titled The vicious cycle of economic inequality. In it, he argues that the extreme inequality this nation has endured the last few decades is undermining our entire society and that we face a decision point now. He explains how our economic elites are rigging the system, turning it into "one dollar, one vote." In parts I do not quote here, he talks about rent seeking and explains more about how inequality is bad for economic growth. The entire article is worth reading. Here are some highlights.
Inequality is now far higher than just 30 years ago. The top 1 percent today gets around 20 percent of the nation’s income — twice what it did two decades ago. The top 0.1 percent’s share has almost tripled. Disparities in wealth are even greater.
But inequality, especially of the U.S. variety, is bad for growth. The country grew faster in the decades after World War II — when it was also growing together, with all groups seeing increases in income. But those at the bottom were growing the most.
By comparison, growth since 1980 has been slower, as the share of the bottom and middle has diminished. That means that those in the middle, ordinary Americans who work for a living, let alone those at the bottom, are getting a smaller slice of a pie that is smaller than if we had continued growing as we did postwar. The net result is disheartening: Most Americans are worse off today than they were 15 years ago.
Our system would increasingly be better described as one dollar, one vote rather than one person, one vote — as the effects of campaign contributions, lobbying, revolving doors and disenfranchisement all take their toll.
Economic inequality feeds into inequalities of political power, leading to still more economic inequality. The U.S. is headed down the path that so many dysfunctional societies have traveled — divided societies in which the rich and poor live in different worlds. The rich residing in gated communities, with their own parks and schools.
There is an alternative. But will our politics allow it? Will those at the top come to realize that a house divided against itself cannot stand — that this level of inequality is not in their enlightened self-interest?
Or will the vast majority of Americans finally realize that they have been sold a bill of goods — trickle-down economics has never worked and is especially not working today.
In other periods of our history, when inequalities and injustices grew to the breaking point, America changed course. The question is: Will we do so again?
What world do you want to live in? Which side are you on?
We still have votes. The question is whether many of us will use those votes in our own interest or support the rising inequality as it consumes our lives.