Paging Horatio Alger: Joseph Stiglitz on How Inequality Harms America

New York City is an odd place, home to financiers who earn more per month than ordinary folks will in a lifetime, but deep poverty as well. People gawk at the high cost of living in New York, but the city's median household income is actually below the national average. The gap between New York's rich and its average is off the charts.

It's against this backdrop that I visited economist Joseph Stiglitz at his office in Columbia Business School in early April to talk about his favorite subject: wealth inequality.

Stiglitz won the Nobel Prize in economics in 2001 for his work on information asymmetries. But it's his commentary on wealth inequality that has gained the most attention from admirers and critics. An article Stiglitz penned for Vanity Fair in May 2011 titled "Of the 1%, by the 1%, for the 1%" set off a wave of discussion about the nation's growing chasm of wealth, and helped spawn the Occupy Wall Street movement. TIME magazine named him one of the 100 most influential people in the world that year.

The article's success led Stiglitz to write a book on the subject. The Price of Inequality is a 500-page work outlining not only the extent inequality in America, but why it matters and how Stiglitz feels it harms the economy.

That's what I came to talk to him about.

A fair shake
Stiglitz's office in Columbia Business school is polished and spacious. There is some irony to this. I have interviewed economists to talk about the benefits of free markets in offices so austere there was no place to sit. Now I find myself with Stiglitz discussing the harms of concentrated wealth while in a glass-walled private library that is part of his office suite -- a suite larger than some apartments I've lived in.

But Stiglitz has earned his success. Lining the walls of the library are several dozen book titles. As I browse, I notice that each is authored by Stiglitz himself. "You wrote all of these?" I ask, awestruck. "Ha, well. These are a fraction of what I've written," he says. He is a giant in his field.

I ask Stiglitz why he became interested in wealth inequality. "I grew up in Gary, Indiana, which was a city marked by large inequalities. I wanted to understand that," he says. "But what has happened in the United States, particularly in the last 30 years, even more in the last ten years, is that inequality has grown out of bounds. The top 1% has doubled the percentage [of income] that it had just 30 years ago. The top 0.1%, three to four times what they got."

The overwhelming majority of those from across the ideological spectrum agree that those who work the hardest, or are the most creative, or the most gifted, should earn the most, and vice versa.

Stiglitz is among them. He is not anti-wealth. "I don't think anybody begrudges somebody who would have invented the laser, or discovered DNA, from becoming wealthy," he says. "They've made an enormous contribution to our society."

What troubles him are those whose fortunes come from advantages that have nothing to do with hard work, genius or discovery. Those who, as he puts it, are "taking advantage of corporate governance deficiencies to seize a larger fraction of the corporate pie to get them outsize benefits."

He often uses the term "rent-seeking" to describe those who don't create new wealth, but extract money out of existing wealth -- especially by nefarious means. Monopolies. Cronyism. Nepotism. Lobbying. Loopholes. Unfair regulations, regulations that stifle competition ... these are a few of the ways Stiglitz sees wealth -- huge amounts of wealth -- flowing to those who he thinks don't deserve it.

Take bankers. Many of those who ran their banks into the ground and stuck taxpayers with losses walked away with fortunes. After Bear Stearns imploded in 2008, former CEO Jimmy Cayne said, "When you lose a billion but you still have several hundred million left, then it's your heirs that get hurt, not you." Stiglitz explains:

That was one of the things that exposed this whole scandal of inequality when the CEOs, particularly the banks, got paid millions and millions of dollars in what they call "performance pay" for bringing the global economy to brink of ruin, and bringing their companies to the brink of ruin so they had to be saved by the U.S. Government. How could you call that performance? And yet they walked home with huge paychecks, and ordinary Americans were left unemployed and paying their bills.

This is prevalent beyond banks, of course. According to The Wall Street Journal, in 2010, "for every 1% decrease in shareholder return, the average CEO was paid 0.02% more."

I asked Stiglitz for more examples.

"Mitt Romney, when he was running for the president, openly said that he was paying only 14% of his reported income, and that he was keeping his income, his wealth, in the Cayman Islands," Stiglitz says. "Now it's very difficult for most of us to keep our income in the Cayman Islands, and he wasn't keeping the money in the Cayman Islands because the sunshine there was making the money grow faster. It was the lack of sunshine that allows for people to avoid taxes, not necessarily illegally, but to take advantage of the loopholes that they have succeeded in putting into the tax law."

Rolling on about taxes, he explains: "The most egregious example of this is the carried interest provision that allows those working Wall Street to treat their income, ordinary income, as if it were capital gains," he says. "So rather than paying 35% or now 39.6%, they get paid the capital gains, and take a tax rate of 15% to 20%."

Stiglitz cites laws that say credit default swaps are the first in line for payouts, but student loans can't be discharged in bankruptcy. He talks about the recent LIBOR interest rate scandal that allowed banks to manipulate interest rates "to take advantage of the rest of the society." He notes that credit default swaps are intentionally left opaque so the client on the other side of the trade has less information. "When markets get transparent, they get competitive. When they get competitive, profits get eroded, and so as an economist, let me say, I totally understand what they're trying to do. But from a public policy point of view, it's outrageous."

Hold on, I say. Those trading credit default swaps are not mom-and-pop novices. They're sophisticated investors who know how the game works. Stiglitz demurs. "I'm not sure that they understand the full consequences. You know, a company may be very sophisticated in making tractors or running their business, but that doesn't mean they're financially sophisticated in credit default swaps."

All of this is getting worse, Stiglitz reminds me. "And even more disturbing," he offers, "is that there has been a lack of equality of opportunity."

Paging Horatio Alger
At a conference last fall, Stiglitz was joined on stage by Harvard economist Martin Feldstein, a conservative voice meant to balance his views.

Feldstein didn't disagree with Stiglitz's fear of inequality. "But to me," Feldstein said, "the important part is poverty, low income, and low wealth." If economists want to talk about (or fiddle with) inequality, they should focus on creating opportunities for the poor, not sneering at the rich.

When I reminded Stiglitz of this conversation, he agreed with Feldstein's sentiment. The problem, Stiglitz said, is that opportunities for the poor are much lower than Americans think.

"Americans really believe the American Dream, that everybody can make it," he says. "The statistics don't show that. The statistics show that an American child's lifetime prospects is more dependent on the income and education of his parents than in almost any other of the other industrial countries."

"The notion of the 'American Dream' is a myth," he boldly states.

This sounds like an appalling claim, but dig into the numbers, and there's a shocking amount of truth to it. In 2010, the OECD calculated the extent to which a son's income is statistically correlated with his father's income, or "the persistence of earnings across generations." In the world of Horatio Alger, there would be little correlation. What your father earned would be irrelevant to the outcome of your career.

But in America, almost 50% "of the economic advantage that high-earnings fathers have over low-earnings fathers is transmitted to their sons," the OECD found. That was a higher correlation than in all other developed nations, save for Italy and Great Britain.

The most common explanation for this is education. Higher-income fathers can provide a good education for their children, which is highly predictive of future wages. Low-income fathers often can't.

Other studies confirm this. In 2001, economist Bhashkar Mazumder calculated that if a father earned $1 more than average, his children could expect to earn $0.50 to $0.60 more than average. Amazingly, Mazumder found that incomes among brothers are more correlated than height or weight. Literally, if you have a brother who is rich and tall, you are more likely to also be rich than you are tall.

Now, everyone knows someone (or is someone) who started from nothing and became something. The problem, as they say in journalism, is that the plural of "anecdote" is not "trend." Yes, some are born into poverty and work their way up into wealth. Many, even. But most don't. Just 4% of those born into the lowest income quintile eventually make it to the top income quintile, but 40% of those born into the highest income group will stay there as adults, according to the Pew Economic Mobility Project. Of those born into the lowest income quintile, more than 70% won't make it out of the bottom half of wage earners as adults. For those born into the richest quintile, more than 63% will remain in the top two income groups as adults.

These are the kind of statistics that rile Stiglitz up. "We have an education system that is very dependent on where you live," he says. "Where you live depends on what you can afford. We've become a more economically segregated society. That is to say, rich people live in their communities, poor people live in their communities much more than it used to be the case. So that means that this access to the kind of education that would allow you to compete in a 21st-century economy is not there for those who are in the bottom of our income distribution."

It wasn't always this way. Inequality has changed dramatically over the last century. "The period after World War II was a period in which we grew together," he says, highlighting the GI Bill. "Inequality came down, and it was a period in which the economy grew faster than in, say, the period after 1980, where we grew apart." 

"The important lesson of that is that you can grow faster with a more equal society. That actually is part of the price of inequality that we pay."

The solutions
Anyone can criticize. What distinguishes a pragmatist from a crank is the proposal of solutions. So I ask Stiglitz a simple question: You're king for a day. What three things would you do to help fix income inequality?

"I would begin with education," he says. "Because to me, opportunity is really important, and we are not giving opportunities. And when I say 'education', I mean preschool. I mean access to health care so that you can take advantage of education. If you don't have adequate health care, you're not going to be able to do well at school."

"Nutrition for children -- I'd put a lot of emphasis on children and opportunity."

"Second thing," he says, "is our tax law. I really do think our tax law distorts our economy and is unfair and has wider consequences. If Americans think that the tax system is unfair, they lose confidence in government. And I think government is very important providing certain basic services to our society."

"And thirdly, there's a whole set of regulations that distort our economy and lead to more inequality and more inefficiency. More effective enforcement of anti-monopoly laws, antitrust laws, more effective regulations so that the banks can't take advantage of the poor with predatory lending and abusive credit card practices and manipulation of markets."

These all sound admirable, I think to myself. But I can't help feeling that the Ivory Tower bias is kicking in. "Begin with education." What does that mean? Open more schools? Raise teacher salaries? Punish bad teachers? Punish bad students? Nearly every politician in the last three decades has expressed a desire to fix education. Many have tried valiantly. Far fewer have succeeded in making a difference. Diagnosing a problem is easier than fixing it.

Same with the tax code. Everyone knows the tax code needs simplification. But try taking away a deduction or a loophole, and someone squirms. "I can't tell you how many times I felt like Charlie Brown," said former White House budget director Peter Orszag last year. "I'd meet with a senator who said they wanted to lower tax rates and broaden the tax base. They'd start by telling me how much they wanted to cut tax rates. Then I'd ask them what deductions they wanted to cut. Mortgage deduction? 'Nope, can't touch that, son.' Health insurance, interest, retirement savings? No, no, no."

As my time ends, I ask Dr. Stiglitz what he would tell a student who comes to his office seeking advice on how to live a better life.

Stiglitz recalls what his parents told him as a youth.

"They said first, money's not going to make you happy," he says. "You need money to live, but what's really important is not money."

As I leave, I'm reminded that annual tuition at Columbia Business School, the building we're meeting in, is $58,000 per year, or 20% more than New York's median household annual income. It takes a tremendous amount of money to gain the opportunity to be taught how little money will do for you. Inequality is a more complicated issue than it seems, I tell myself.

Check back every Tuesday and Friday for Morgan Housel's columns on finance and economics

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  • Report this Comment On April 24, 2013, at 12:09 PM, astuber9 wrote:

    Damn right, inequality is a very complicated issue. I don't have a problem with any of Stiglitz's three solutions, but he failed to point out two big limitations to remind ourselves of regarding more government/regulations to punish criminals: 1 - Don't let the public think because the government is making their best effort to catch the crooks that they can relax as consumers because Uncle Sam is looking out for them - Caveat Emptor still reigns supreme.

    2 - The process of more legislation and enforcement to catch the criminals is very difficult and expensive in reality and a constant game of cat and mouse. Kind of like athletes and performance enhancing drugs. Typically they are one step ahead of the regulators. That doesn't mean you give up, just don't think you can pass a couple of laws and the problems are fixed forever.

  • Report this Comment On April 24, 2013, at 1:08 PM, TheJadeMonkey wrote:

    I recently read a Buffet quote attacking options trading, loosely paraphrased "all that thrashing about does nothing to increase the market's returns, but it does take thousands of people to man the casino." Does the complexity of the tax code work the same way? I mean, do all those deductions cancel each other out and leave only the friction of filing and return costs? Or is Dr. Stiglitz's complaint that the tax code is used as mechanism for inequality-producing transfers of wealth?

  • Report this Comment On April 24, 2013, at 8:20 PM, MartyTheCanuck wrote:

    Solutions are availables, but politicians (from both sides ) and interest groups don't want them.

    1- School vouchers

    2- Broader tax base and lower rates, with a simpler tax code

    3- Delink health insurance from work, equalize tax treatment of different health plans andallow catastrophic insurance and health saving accounts

    4- Focus help on needy families instead of universal entitlements

    5- Close loopholes such as the carried interest provisions

    Dems oppose 1 and 2, Obamacare forbids 3, people won't accept 4, GOP opposes 5.

    Statu quo remains.

  • Report this Comment On April 25, 2013, at 11:36 AM, seattle1115 wrote:

    One of the best books I've ever read on the subject of inequalities in wealth distribution and opportunity is Kevin Phillips' "The Politics of Rich and Poor: Wealth and the American Electorate in the Reagan Aftermath." Phillips' thesis is that redistribution of wealth from the middle class to the elite was the very purpose of federal fiscal policy during the 80's. Bear in mind that Phillips is no wild-eyed Marxist - he was a presidential advisor during the Nixon administration. The book was written over 20 years ago, and it's shocking that we as a culture have allowed the problem to get worse in that time, rather than demand that it be addressed.

  • Report this Comment On April 25, 2013, at 3:30 PM, deckdawg wrote:

    Couldn't agree more on the issue of rent seeking, cronyism, etc. That's a problem as old as civilization and eventually leads to big trouble. One might make the argument that, in our particular society, the Ivy League is the biggest contributor to the whole mess. Pull back the covers of any of our financial disasters over the past 30 years, and there's a group of Yale or Harvard grads to blame. The Ivy League is a synonym for cronyism. (Obviously, the Ivy league system isn't the only problem, but a big one.)

    Spend some time with poor people, and specifically poor people's kids. It doesn't take a PhD to observe that poverty is more or less hereditary. Our parents, our home life, and especially our fathers almost always shape who we are. An external education system (no matter how early it starts) can only rarely overcome that. The correlation between a father's earnings and his children's earnings is that simple. (We're speaking statistically... obviously there are exceptions both ways). A father (if there's even a father in the home) is going to transmit his attitudes toward work, the value of education, self discipline, saving, thrift, etc., to his children.

  • Report this Comment On April 25, 2013, at 3:40 PM, mdk0611 wrote:

    deck - Fair points, which leads one to wonder why Stiglitz underplays the effects of single parent families.

  • Report this Comment On April 25, 2013, at 6:38 PM, MartyTheCanuck wrote:

    Agree with Deck. But talking about 2 parents-home or role of father sounds so old-school, if not racist or homophobic.

  • Report this Comment On April 25, 2013, at 6:51 PM, icehercdriver wrote:

    There is nothing keeping Prof Stiglitz from helping out the inequality by giving some of his hard earned currency to those who are struggling to make the American dream reality, perhaps to his local NY city school system.

    One of the main causes of inequality is that the government has taken over role of provider of welfare to society and the result is a weakening of communities and families that is multiplied by greed that is endemic in government.

  • Report this Comment On April 25, 2013, at 6:52 PM, icehercdriver wrote:

    Stiglitz's office in Columbia Business school is polished and spacious. There is some irony to this. I have interviewed economists to talk about the benefits of free markets in offices so austere there was no place to sit. Now I find myself with Stiglitz discussing the harms of concentrated wealth while in a glass-walled private library that is part of his office suite -- a suite larger than some apartments I've lived in

  • Report this Comment On April 25, 2013, at 8:21 PM, damilkman wrote:

    One of my big problems with all of these wealth inequality discussions is the bigwigs never talk about the impact of ambition. They always talk about fixing the tax code, fixing the education system, tinkering with wealth redistribution. I would not be surprised if someone proposed a pill to fix all of our problems. In my opinion all of these solutions proposed by pundits including this Nobel prize winner are all ultimately doomed to failure because they believe they can fix other people and systems in spite of themselves.

    Ambition is a fleeting thing that is hard to measure. Like a rainbow it can disappear in a flash. What makes one Steve retire from Apple content to live a life out of the spot light. Yet the other Steve is driven his entire life? Whoever can solve this question has a better opportunity of fixing the wealth inequality problem then a well meaning technocrat. An individual who can fire the imagination of a room of disenfranchised children is worth more then several millions of federal programs.

    Some people have alluded to the impact parents have on their children. It is my opinion that the children of successful parents are not successful because of the wealth of parents but because the parents are more likely to install this ambition in their children. For some children it is easy because they have inherited their parents intelligence. Other children who are not so gifted still push themselves because they are pushed by this thing called ambition. We have observed examples of great teachers in impoverished regions who have inspired the children of the poorest. How do you standardize and make available to all this mythical ability that these firebrands seem to possess? That is worth a barrel of Nobel prizes.

    My problem with the pundits is they do not seem to be interested in fixing the problem. They believe that greater wealth distribution, more privilege, and more services will magically fix the problem. You can give someone the world. But if you do not fire their ambition the money spent is less useful then aid to Haiti. If you can live in relative comfort in the margins of society why bother? Maybe this is not possible in New York City. But there are a lot of places where you can. I am not blaming anyone who would make this decision. This is just part of the human condition. If we can get in the heads of people and fire them up, they will take of the problem for us and we can concentrate on assisting them instead of figuring out what additional privileges we should give to them.

    And PS, next time the greedy bankers run their companies into the ground, don't bail them out. Let them burn. Maybe for a little while people will realize them for the charlatans they are.

  • Report this Comment On April 25, 2013, at 9:33 PM, blablableh wrote:

    Is fool.com an investing website or a political website? Why is this on the front page of fool.com? I just skimmed the article because I won't waste my time reading this crap, but how is this related to investing? If Morgan House wants to write political articles, why doesn't he do go to huffingtonpost to do it?

  • Report this Comment On April 25, 2013, at 9:44 PM, TMFMorgan wrote:

    My favorite comments are always those that say "I didn't read this article, but here's why I don't like it."

    Economic growth should be important to investors. You don't have to agree with what Stiglitz says -- I don't agree with a lot of it, but he offers perspective.

    -Morgan

  • Report this Comment On April 25, 2013, at 10:38 PM, TerryHogan wrote:

    Here's one I'd like to try. Take the worst performing school in your district, and guarantee a full ride 4-year scholarship to the top 2 males and top 2 females. If it's just kids from underpriviledged backgrounds going to that school, it will help them out and over time maybe help lower inequality. If you get smart middle-income parents trying to game the system by sending their kids to that school in hopes of their kids gettting the scholarship, that's okay too, as you'd be desegregating (in the rich vs poor sense) the school a little bit, and maybe have some more active parents working to help raise the performance of the school.

    Of course this is pretty expensive even for just 1 school district, but maybe Zuckerberg or Gates could pay for it.

  • Report this Comment On April 25, 2013, at 11:10 PM, CHill8008 wrote:

    I don't know exactly how the following was calculated: "But in America, almost 50% 'of the economic advantage that high-earnings fathers have over low-earnings fathers is transmitted to their sons,' the OECD found." I am by no means an expert on the subject, but I have been familiar with twin-studies in the past. Adopted sons tend to do as well as their BIOLOGICAL fathers. Identical twins separated at birth tend to be remarkably similar in education, income, etc, later in life. “Virtual twins”, i.e. those adopted into the same house at the same time but are not siblings in a biological sense, perform about as well as two strangers would have despite having the same education, nutrition, and income in childhood. This is not to be confused with genetic-determinism, but there does seem to be a correlation and I’d like to know how OECD adjusted for this. Also, much of the above data come from databases in Scandinavian countries, but has been tested where more limited data were available with similar results. I suspect that you cannot simply educate your way out of inequality. Each needs to have the opportunity to reach their potential, but not everyone has the same potential, and it is not a tragedy, and not one that can be fixed with the right policies. Stiglitz was given a Nobel for info-asymmetry, a powerful concept with far-reaching application as individuals need to have info to optimize their decisions, but it must remain their decision, and addressing info-asymmetries may do about as much to effect change in wealth-inequality as much as addressing info-asymmetries does to effect change in height-inequality. Stiglitz received no other Nobel prize for anything else, and his opinion may be informed by his science, but any science does not compel any action no matter how informed. This is the second article featuring Stiglitz in a very short time. Aren't there others? What about Thaler? He's sharp and personable and gave us behavioral economics, a nice counterpoint to Stiglitz's "top-down" NeoKeynesianism.

  • Report this Comment On April 26, 2013, at 5:51 AM, tempodulu wrote:

    The answer is very simple: an 80% income tax rate for those earning more than US$1 million.

  • Report this Comment On April 26, 2013, at 10:21 AM, astuber9 wrote:

    On April 25, 2013, at 6:38 PM, MartyTheCanuck wrote:

    Agree with Deck. But talking about 2 parents-home or role of father sounds so old-school, if not racist or homophobic.

    What you call "old-school" I call a strong statistical correlation.

  • Report this Comment On April 26, 2013, at 7:23 PM, decebalvs wrote:

    " "the persistence of earnings across generations." In the world of Horatio Alger, there would be little correlation. What your father earned would be irrelevant to the outcome of your career."

    There's something wrong and chaotic with that picture.

    The article started well, then drifted into a view of things which cannot possibly work, for anyone.

    Eliminating leeches is one thing, eliminating learning and inheritance (of traits, and so on), is an absurd proposition

  • Report this Comment On April 26, 2013, at 9:19 PM, MisterFungi wrote:

    Terrific article. Clear, well-written, informative. Thank you!

  • Report this Comment On April 26, 2013, at 10:21 PM, NOTvuffett wrote:

    Why exactly should I care about the pronoucements of lefty professor Stiglitz from his ivory tower?

    It takes him 500 pages to convey his thesis? This reminds me of reading Jean Paul Sartre's "Being and Nothingness". Much ado about nothing, lol.

    Mr. Housel, there may be hope for you yet, since you came away from the meeting less than awe-struck at having met the winner of a Nobel prize. I have met a couple of Nobel prize winners (chemistry/physics). Thank god it wasn't Paul Krugman and Yassar Arafat, lol. Those crazy Swedes, lol. One of the guys I met wore a brown suit and sandals with socks, lol.

  • Report this Comment On April 26, 2013, at 10:48 PM, NOTvuffett wrote:

    it is not difficult to compute this:

    brown suit + sandals + socks = fashion faux pas

  • Report this Comment On April 27, 2013, at 12:00 AM, irvingfisher wrote:

    Sure, but how do i make money off of this?

  • Report this Comment On April 27, 2013, at 1:56 PM, xetn wrote:

    There is no such thing as equality and never can be. There are no two people in the world that are equal (except in superficial terms).

  • Report this Comment On April 27, 2013, at 2:06 PM, xetn wrote:

    As for the comment about education, we should have much more of this:

    http://www.dailymail.co.uk/femail/article-2311690/The-family...

    and a whole lot less of the government prisons they call public schools, which teach to the lowest level and stifle imagination and curiosity.

  • Report this Comment On April 27, 2013, at 3:00 PM, Taxman44035 wrote:

    Poverty is no problem! That just takes a girl with low morals! Boom 9 months later you have poverty! Make her lazy and you have abject poverty!

    Wealth on the other hand requires ideas, hard work, lucky decisions, planning, etc. Gov't can't provide that! You want more poverty...provide more benefits!

    Bye the way, "make them pay their fair share" is not talking about the rich but the lower 50% of the taxpayers who pay NO taxes. If you are an America, and a part of this country, you should pay SOME tax!

  • Report this Comment On April 27, 2013, at 9:28 PM, NOTvuffett wrote:

    When is the Fool going to get get their shiite together? This is tiresome, broken almost every weekend.

    A woman with loose morals? lol. Send her my way. I may not put a ring on her finger, but I could give her a good jostle. Who knows? maybe I could be her baby daddy and you can pay for my phone and groceries.

  • Report this Comment On April 27, 2013, at 9:37 PM, bbell46356 wrote:

    One of Stiglitz solutions is higher funding for education. Stiglitz home town of Gary has one of the highest per student funding rates in Indiana, and one of the poorest outcomes. Yet private schools in the same community do much better.

  • Report this Comment On April 27, 2013, at 10:32 PM, whereaminow wrote:

    Income inequality increased dramatically this century because of the Cantillon Effects of paper money creation.

    Stiglitz supports that. So he's talking out of both sides of his mouth. As all Progressives do.

    David in Liberty

  • Report this Comment On April 28, 2013, at 11:36 PM, ibuildthings wrote:

    It is harder and harder for a middle class person to educate their children. The public schools in non-rich areas are atrocious. The private schools are too expensive. Home-school is an option, but requires a single-income household to pull off.

    And the uber-rich can afford taxes. There just aren't enough of them to tax to pay for the army of unskilled/uneducated people who require government support money. We have a 40% rate of out of wedlock births, a near guarantee of poverty for the children. So the middle class is where the tax hit comes. We can't afford to have a lot of our own children, where our parents could have 3-5 children and trust the schools to educate them. We have to pay for everyone else's kids, and with the remaining money, figure out how to feed and educate ours.

  • Report this Comment On May 01, 2013, at 2:16 PM, Boston120 wrote:

    Stiglitz is a leftist of the old school who mixes some good observations with a load of marxist claptrap. Whining about predatory lending that these terrible banks do is silly. However, that managements have raided the corporate coffers is right on. The latter I put down to the eviseration of corporate law concepts of corporate waste in Delaware and other states. The salaries and bonuses taken down by some managements when authorized by compliant boards is truly breathtaking. If board members were held accountable to a stricter standard we would all be better off. However, what about the incredible salaries paid to professional athletes (grown men playing childrens games) that are largely funded by corporations buying tickets, boxes and suites and deducting the cost from their taxes And so it goes..

  • Report this Comment On May 15, 2013, at 11:58 PM, phrush wrote:

    I am sorry, but I am just so disgusted with almost all of you commenting on this. Why can't you get beyond your liberal or conservative dogmas for a minute and THINK. Buried in the article is a critical point - the economy (and the entire society) does better when we are becoming more equal, and THIS HAPPENS WHEN OPPORTUNITY IS MORE EQUALLY AVAILABLE TO THOSE LOW ON THE INCOME SPECTRUM. Think about this before you respond. It does not imply we as a people win when we play the "I got mine, Jack" game and it does not imply that you can gain anything by equalizing results without requiring people to earn those results. It does demand that we structure society to invest extra resources in creating more and better OPPORTUNITY for those whose familial and cultural realities do not provide the same opportunity as that provided for the children of the rich and successful. And it surely means that virtually EVERYTHING we do that subsidizes the rich and powerful at the expense of the poor and middle class is economically destructive and terrible public policy.

    How about liberal and conservative arguments over HOW to enhance opportunity for those with less access today. That might be interesting. Stiglitz and Feldstein are at least trying to conceptualize this. Contribute your ideas people, and tell us WHY you think they will make things better. But please, don't just repeat your favorite cable news guy's talking points.

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