Stiglitz, delivering on his title, The Price of Inequality, catalogs the economic inefficiencies caused by an extreme income distribution. The mega-rich can’t spend all of their income; depressed aggregate demand causes high unemployment; human potential is wasted; corporations rig competitive markets to reap monopoly profits; the immensely wealthy engage in speculation rather than productive investment. As the political system mirrors the economy’s inequality, financial elites keep their thumbs on the scale of policy. The result, writes Stiglitz, is “our under-investment in the common good.”Or as Republicans would put it, "Mission accomplished."
Monday, June 04, 2012
Good summary of the problem of wealth inequality.
This entire piece about Krugman and Stiglitz is an interesting read, but this passage jumped out.