We, the People, call upon Nobel Prize winner Joseph Stiglitz to testify about “How Today’s Divided Society Endangers Our Future.”
[note: the following testimony is from Stiglitz’ book, “The Price of Inequality.” A subsequent post will cover Stiglitz” thoughts on “People, Power, and Profits” – from which the first quote is from:]
Stiglitz: “In America’s money-driven politics..bankers..used their wealth to get rules that allowed them to make ever more money at the expense of others, through deregulation, and when that failed miserably, they used their influence to get the largest public bailout in the history of the world, while letting those..they had preyed on, homeowners and workers alike, to largely fend for themselves.”….
“The shortsightedness and moral turpitude of our money-focused bankers spread, infecting our economy, our politics, and our society. In many ways, it has changed who we are, making so many Americans more materialistic, more selfish, and more shortsighted.”
[Note: please reread this again – many times. Dwell on every thought. The corruption our Founders so feared and
worked to prevent has been DELIBERATELY inflicted on America, like a malignant cancer.]
Stiglitz: “One reason the invisible hand may be invisible is that it is simply not there.”
Stiglitz: “American inequality didn’t just happen. It was created..Much of the inequality that exists today is a result of government policy, both what..government does and what it does not do.”
Stiglitz: “Widely unequal societies do not function efficiently, and their economies are neither stable nor sustainable in the long term..We know how extremes of inequality play out because too many countries have gone down this path..The experience of Latin America, their region..with the highest level of inequality, foreshadows what lies ahead.”
Stiglitz: “Of all the costs imposed on our society by the top 1%, perhaps the greatest is this: the erosion of our sense of identity in which fair play, equality of opportunity, and a sense of community are so important…our democracy is being put at peril.” [Note: “put at peril” for amoral, immoral, obscene. G R E E D.]
Stiglitz: “Cooperation and trust are important in every sphere of society..most good behavior is voluntary..throughout history..economies that flourished are those where a man’s word is his honor..trust underlies all notions of social capital..Social capital is the glue that holds societies together. In America there has been at the forefront of the trend. An entire industry that was once based on trust has lost it.”
“The breaking of the social bonds and trust – seen in our politics, in oir financial sector, and in the workplace – will inevitably, have broader societal consequences…By allowing inequality to metastasize unchecked, America is choosing a path of destruction os social capital, if not societal conflict..”…
“We tell the truth because it is the right or moral thing to do..”
Stiglitz: “The central argument is..the model that best describes income determination at the top is not one based on individual’s contributions to society…Much of the income at the top is instead what we have called rents. These rents have moved dollars from the bottom and middle to the top, and distorted the market to the advantage of some and to the disadvantage of others.”
Stiglitz: “A central theme..is..there has been a battle of ideas – over what kinds of society..of policies, are best for most citizens – and..this battle has seen an attempt to persuade everyone..what’s good for the 1%, what the top cares about and wants, is good for everyone: lower tax rates at the top, reduce the deficit, downsize government.”
Stiglitz: “A central theme..is..much of the inequality in our society arises because private rewards differ from social returns, and..the high level of inequality that now characterizes the United States, and the widespread acceptance of that level of inequality..makes it difficult in the United States to adopt good policies. Policy failures include those in macroeconomic stabilization, industrial deregulation, and underinvestment in infrastructure, public education, social protection, and research.”
Stiglitz: “We are paying a high price for our inequality – an economic system that is less stable and less efficient, with less growth, and a democracy that has been put in peril. But even more is at stake: as our economic system is seen to fail for most citizens, and as our political system seems to be captured by money interests, confidence in our democracy and in our market economy will erode along with our global influence.”
Stiglitz: A standard U.S. mantra: taxes stifle growth. “..far from it. Over the period 2000 to 2010, high-taxing Sweden..grew faster than the United States..taxes financed public expenditures – investments in Education, technology, and infrastructure – and the public expenditures were what..sustained the high growth.”
Stiglitz: Good financial regulation helped the United States – and the world – avoid a major crisis for four decades after the Great Depression. Deregulation in the 1980s led to scores of financial crises in the succeeding decades…2008-09 was only the worst..those governmental failures were no accident: the financial sector used its political muscle to make sure..market failures were not corrected..”
Stiglitz: The top 1% is very good at moving money from the bottom of the income pyramid to the top. “The financial sector has developed expertise in a wide variety of forms of rent seeking..I mention the financial sector because it has contributed so powerfully to our society’s current level of inequality…Those at the top have managed to design a tax system in which they pay less than their fair share – they pay a lower fraction of their income than do those who are much poorer.”
Stiglitz: “Three factors contributed to..increased monopolization of markets..there was a battle over ideas about the role..government should take in ensuring competition…A massive program to “educate” people, and especially judges, regarding these new [Chicago School] doctrines of law and economics, partly sponsored by right-wing foundations like the Olin Foundation, was successful..; A second factor..is related to changes in our economy..creation of money power was easier in some..new growth industries..; ..the third factor:..business found new ways of resisting entry, reducing competitive pressures.”
Stiglitz: Getting to set the rules and pick referees is important. “..regulatory agencies are responsible for oversight of a sector…The problem is..[economic] leaders in these sectors use their political influence to get people appointed to the regulatory agencies who are sympathetic to their prospectives. Economists refer to this as “regulatory capture.”…[Also]..mindset of regulators is captured..”cognitive capture..”
Stiglitz: “Sometimes government munificence..takes the form of rewriting the rules to boost profits. An easy way to do this is..Tariffs..[Then there are..distortionary subsidies [which] stem from a single source: politics…the vast preponderance of government money subsidizing agriculture [goes] ..from the rest of us to the rich and corporate farms..to describe each and every imstance of government approved rent seeking would require [a] book.”
Stiglitz: “..other advanced industrial countries with similar technology and per capita income differ greatly from the United States in inequality of pretax income, in equality of after tax income, and transfer income, in equality of wealth, and in economic mobility…also differ greatly..in..trends in these four variables over time.
“Markets..are shaped by political processes..the way we have been shaping America’s market economy works to the advantage of those at the top and to the disadvantage of the rest.”
Stiglitz: “When we wonder how it is..financiers get so much wealth, part of the answer is simple: they’ve helped write a set of rules that allows them to do well, even in..crises..they help create.”
Stiglitz: “The way globalization has been managed..has itself led to still lower wages because workers’ bargaining power has been eviscerated…imagine..what the world would be like if there was free mobility of labor, but no mobility of capital. Countries would compete to attract workers..promise good schools and a good environment..low taxes on workers..that’s not the world we live in..because the 1% doesn’t want it that way.”
Stiglitz: “President Reagan’s breaking of the air controller’s srike in 1981 represented a critical juncture in the breaking of strength of unions.”
Stiglitz: “The most egregious aspect of recent tax policy was the lowering of tax rates on capital gains..first under Clinton and again under Bush…we have given the very rich, who receive a large fraction of their income in capital gains, close to a free ride. It doesn’t make sense..investors, let alone speculators, should be taxed at a lower rate than someone who works hard for his living, yet that’s what our tax system does…The net effect is..the superrich actually pay on average a lower tax rate than those less well off..”
Stiglitz: “The rich and superrich often use corporations to protect themselves and shelter their income, and they have worked hard to ensure..the corporate income tax rate is low and the tax code..riddled with loopholes. Some corporations make such extensive use of these provisions..they don’t pay any taxes…and some, like GE, actually get money back from the government..multinationals like GE often shift income around…A..GAO study found..55% of U.S. companies paid no federal income taxes during at least one year in a 7-year period it studied.”
Stiglitz: A 2004 study showed the Bush tax cuts as: the middle 20% got 8.9%; the top 1% got 24.2%. And – investment, other than real estate, “actually fell, contrary to what some on the right had predicted..the cut in the estate tax may have discouraged spending; the rich could now safely stow away more money for their children and grandchildren..had less incentive to give away money to charities that would have spent the money on good causes.”
Stiglitz: “..tax cuts for the rich have increased the deficit and..national debt substantially has another effect: it has created pressure to reduce government support for investments in education, technology, and infrastructure. The Right has underestimated the importance of these public investments..” including all the 1800-1970 physical evidence that it powered American superpower status.
Stiglitz: “Citizens United..”represented a milestone in the disempowerment of ordinary Americans. It was hard to justify the Court’s decision on philosophical terms..It is generally recognized..providing money [support] conditional on a candidate’s providing a favor [supporting a bill] is corruption..there is little difference between that and what actually occurs..no FORMAL quid pro quo; but the effect is the same…most importantly, the perception by ordinary citizens is the same, so it weakens faith in our democracy little less than blatant corruption does.”
“The Court’s action was..just another reflection of the success of the moneyed interests in creating a system of ‘one dollar one vote’; they had succeeded in electing politicians who in turn appointed judges who would enshrine a corporation’s right to unbridled spending in the political area.”
Stiglitz: “..equally important..was the Court’s 2011 striking down [in Arizona Free Enterprise Cub..]..Arizona’s attempt to redress the imbalance of political power created by the imbalance of economic power by providing additional funds to candidates who were less successful in raising campaign money. Trusting the Court is important, because..it is vital..courts be viewed as fair arbiters..if the Court is viewed as not fair..even before arguments have been presented – then the Court’s main source of strength, its credibility and the influence it has in public opinion, will quickly disappear.” [note: post “Shelby.” more gun “rights” rulings, Dobbs, etc. – this came true. We are now awaiting the “supreme court’s” decision on whether ANY president has unfettered immunity. If this “court” buys that outrageous garbage, then IT IS OVER. The anti-George Washington can become dictator who can do ANYTHING]
[note: read this Stiglitz book – and others. He provides YOU with enough facts and analysis to absolutely prove why “The Far Right IS a Threat to Democracy’, most especially the rich and their corporations, “foundations,” etc. The 2024 America YOU now live in is not an accident – over 50 years of planning and conspiracy [REAL CONSPIRACY by the rich] are now shown to be highly successful. Look up the data yourself; UNSPUN. Census Bureau, IRS, GAO, CBO facts; lokk up pre-1980 and post-1980 income and wealth stats, WHO pays and doesn’t pay pre-1980 and post-1980 taxes; look up how the TAX RATES have been lowered on the rich and their corporations……]
With Justice For All 