The Perils of Economic Inequality

From Of the 1%, by the 1%, for the 1% by Joseph Stiglitz

Americans have been watching protests against oppressive regimes that concentrate massive wealth in the hands of an elite few. Yet in our own democracy, 1 percent of the people take nearly a quarter of the nation’s income—an inequality even the wealthy will come to regret.

An economy in which most citizens are doing worse year after year—an economy like America’s—is not likely to do well over the long haul. There are several reasons for this. . . .

First, growing inequality is the flip side of something else: shrinking opportunity. . . .

Second, many of the distortions that lead to inequality—such as those associated with monopoly power and preferential tax treatment for special interests—undermine the efficiency of the economy. . . .

Third, and perhaps most important, a modern economy requires “collective action”—it needs government to invest in infrastructure, education, and technology. . . .

Twenty-five years ago the top 1% had 12% of the income. Now they have 25% and the Republicans are dedicated to even greater concentration of wealth while the Democrats play along.