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The failures in politics and economics are related, and they reinforce each other. A political system that amplifies the voice of the wealthy provides ample opportunity for laws and regulations--and the administration of them--to be designed in ways that not only fail to protect the ordinary citizens against the wealthy but also further enrich the wealthy at the expense of the rest of society. This
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Joseph E. Stiglitz |
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The economic elite have pushed for a framework that benefits them at the expense of the rest, but it is an economic system that is neither efficient nor fair. I explain how our inequality gets reflected in every important decision that we make as a nation--from our budget to our monetary policy, even to our system of justice--and show how these decisions themselves help perpetuate and exacerbate this inequality.13 Given
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Joseph E. Stiglitz |
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It may seem to readers that I talk too much about the bankers and corporate CEOs, too much about the financial crisis of 2008 and its aftermath, especially (as I'll explain) since the problems of inequality in America are of longer standing. It is not just that they have become the whipping boys of popular opinion. They are emblematic of what has gone wrong. Much of the inequality at the top is associated with finance and corporate CEOs. Bu..
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Joseph E. Stiglitz |
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Trickle-up economics can work, even when trickle-down economics doesn't. Even
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Joseph E. Stiglitz |
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While it is not always clear what is fair, and people's judgments of fairness can be biased by their self-interest, there is a growing sense that the present disparity in wages is unfair. When executives argue that wages have to be reduced or that there have to be layoffs in order for corporations to compete, but simultaneously increase their own pay, workers rightly consider that what is going on is unfair. That will affect their effort to..
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Joseph E. Stiglitz |
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For most people, wages are the most important source of income. Macroeconomic and monetary policies that result in higher unemployment--and lower wages for ordinary citizens--are a major source of inequality in our society today. Over the past quarter century macroeconomic and monetary policies and institutions have failed to produce stability; they failed to produce sustainable growth; and, most importantly, they failed to produce growth t..
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Joseph E. Stiglitz |
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In truth the macroeconomic models placed too little attention on inequality and the consequences of policies for distribution. Policies have been based on these flawed models both helped create the crisis and have proven ineffective in dealing with it. They may even be contributing to ensuring that when the recovery occurs, it will be jobless. Most importantly, for the purposes of this book, macroeconomic policies have contributed to the hi..
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Joseph E. Stiglitz |
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End corporate welfare--including hidden subsidies. We explained in earlier chapters how the government too often, rather than helping people who need assistance, spends its valuable money helping corporations, through corporate welfare. Many of the subsidies are buried in the tax code. While all the loopholes, exceptions, exemptions, and preferences reduce the progressivity of the tax system and distort incentives, this is especially true o..
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Joseph E. Stiglitz |
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Comprehensive reform of bankruptcy laws--from the treatment of derivatives to underwater homes and to student loans. Bankruptcy law offers another example of how the basic rules of the game that determine how markets work have strong distributional consequences, as well as effects on efficiency. As in many other areas, the rules have increasingly favored those at the top. Every loan is a contract between a willing borrower and a willing len..
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Joseph E. Stiglitz |
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During the nineties a new culture had developed, one in which firms focused on the bottom line--today's profits, not long-run profits--and took quick and decisive actions when they faced problems. Firms that kept on workers when they were no longer needed were viewed as softhearted and softheaded. "Chain-saw Al" Dunlap, Sunbeam's CEO, who got a reputation for axing workers and cutting costs with a new ruthlessness, may have been an extreme ..
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Joseph E. Stiglitz |
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the newly elected government was told in effect that they had no choice: accept the conditions or your banking system will be destroyed, your economy will be devastated, and you will have to leave the euro. What does it mean to be a democracy, where the citizens seemingly have no say over the issues about which they care the most, or the way their economy is run?
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Joseph E. Stiglitz |
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Globalization is the field on which some of our major societal conflicts--including those over basic values--play out. Among the most important of those conflicts is that over the role of government and markets.
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Joseph E. Stiglitz |
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As those, for instance, in Ireland celebrate the return to growth (in 2015 it was Europe's fastest growing economy),1 they need to remember: every (or almost every) economy recovers from a downturn.
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Joseph E. Stiglitz |
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While GDP is the standard measure of economic performance,2 there are other indicators, and in virtually every one, the eurozone's overall performance is dismal, and that of the crisis countries, disastrous: unemployment is very high; youth unemployment is very, very high; and output per capita is lower than before the crisis for the eurozone as a whole, much lower for some of the crisis countries.
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Joseph E. Stiglitz |
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The growth in asset management income accounts for roughly 35 percent of the growth of the financial sector as a percent of GDP, driven by the opaque fee structures, especially when it comes to alternative investment vehicles.36 But in spite of their high fees, there is little evidence of any advantages, for instance in better long-run performance, when it comes to higher management fees.37 Other key sources of financial profits have come f..
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Joseph E Stiglitz |
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Just as Guantanamo and Abu Ghraib have eroded America's moral authority, so the Bush administration's fiscal housekeeping has eroded our economic authority.
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Joseph E. Stiglitz |
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Oxfam found that the top 1 percent of the world now owned nearly half the world's wealth-- and are on track to own as much of the rest of the 99 percent combined by 2016.
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Joseph E. Stiglitz |
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The NASDAQ Composite Index, containing mostly technology shares, soared from 500 in April 1991 to 1,000 in July 1995, surpassing 2,000 in July 1998, and finally peaking at 5,132 in March 2000. The stock market boom reinforced consumer confidence, which also reached new highs, and provided a strong impetus for investment, especially in the booming telecom and high-tech sectors. The next few years confirmed suspicions that the numbers were un..
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Joseph E. Stiglitz |
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On every criterion by which performance is usually measured, the eurozone has been failing. Its performance has been poor relative to the United States, from which the crisis originated, and relative to non-eurozone Europe. Even Germany could not escape.
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Joseph E. Stiglitz |
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We should remember why those programs were started: before the arrival of Medicare and Social Security, the private sector left most elderly bereft of support, the market for annuities essentially didn't exist, and the elderly couldn't get health insurance. Even today, the private sector doesn't provide the kind of security that Social Security provides--including protection against market volatility and inflation. And the transactions cost..
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Joseph E. Stiglitz |
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The Securities and Exchange Commission was created in 1934, and, together with other checks and balances (including class-action suits), it helped build a sense of professional ethics among managers, auditors, and other market participants, leading to the creation of a securities market of unprecedented size, with unprecedented participation. At the peak of the market in March 2000, the market capitalization of U.S. stocks (as measured by t..
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Joseph E. Stiglitz |
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Why do investors fail to realize that money placed in a mutual fund that tries to pick "out-performing stocks" is unlikely to yield a better return than money invested in the S&P 500? If fund managers and investment advisers are so good at picking stocks, why are they risking your money rather than their own? Some"
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Joseph E. Stiglitz |
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Europe's reaction to the UK's referendum was dominated by the same harsh response that greeted Greece's June 2015 ballot-box rejection of its bailout package. Herman Van Rompuy, former European Council1 president, expressed a widespread feeling when he said that Cameron's decision to hold a referendum "was the worst policy decision in decades." In so saying, he revealed a deep antipathy toward democratic accountability." --
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Joseph E. Stiglitz |
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Jean-Claude Juncker, the proud architect of Luxembourg's massive corporate tax-avoidance schemes and now the head of the European Commission, has taken a hard line--perhaps understandably, given that he may go down in history as the person on whose watch the dissolution of the EU began.
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Joseph E. Stiglitz |
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Ask not what your country can do for you, ask what you can do for your country
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Joseph E. Stiglitz |
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misshapen economy creates misshapen individuals and a misshapen society
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Joseph E. Stiglitz |
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aunque la economia de goteo hacia abajo no funciona, la economia de goteo hacia arriba si puede funcionar: todo el mundo --incluso los de arriba-- podria beneficiarse dando mas a los de abajo y a los de en medio.
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Joseph E. Stiglitz |
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But Dutch and other European milk producers would like to increase sales by having their milk, transported over long distances, appear to be as fresh as the local product. In 2014 the Troika forced Greece to drop the label "fresh" on its truly fresh milk and extend allowable shelf life."
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Joseph E. Stiglitz |
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truth-telling, truth-discovering, and truth-verification institutions evolved, and we owe to them much of the success of our economy and our democracy.21 Central among them is an active media. Like all institutions, it is fallible; but its investigations are part of our society's overall system of checks and balances, providing an important public good.
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Joseph E. Stiglitz |
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We know through advances in behavioral economics and marketing that one can manipulate perceptions and beliefs.
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Joseph E. Stiglitz |
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Cigarette companies succeeded in using these methods to cast doubt on scientific findings that smoking was bad for health; and firms of all kinds succeed in persuading individuals to buy products that they might not otherwise have bought,
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Joseph E. Stiglitz |
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The eurozone was flawed at birth.
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Joseph E. Stiglitz |
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Curbing the financial sector. Since so much of the increase in inequality is associated with the excesses of the financial sector, it is a natural place to begin a reform program. Dodd-Frank is a start, but only a start. Here are six further reforms that are urgent: (a) Curb excessive risk taking and the too-big-to-fail and too-interconnected-to-fail financial institutions; they're a lethal combination that has led to the repeated bailouts ..
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Joseph E. Stiglitz |