I recently sat down with Nobel Prize-winning economist Joseph Stiglitz in his office at Columbia Business School.
In this clip, Stiglitz discusses why he worries about poverty in America. Have a look. (A transcript follows.)
Joseph Stiglitz: I really do worry about poverty, and especially poverty traps where you have one generation after another, and that has to do with a lack of upward mobility. I think we have to focus on the middle class. The fact is the middle right now hasn't been doing very well. A full-time male worker, median, in the middle, half above, half below, has an income lower than it was 40 years ago. Now an economic system that doesn't deliver any progress to the typical worker is not working the way it should. So that's a real problem to me.
Now it's also the case that we have a problem at the top. Now as I said before, I don't begrudge anybody that discovers, makes an important discovery, makes an important innovation. He gets a high income, that's fine. What I do object to is rent-seeking. I do object to people making money by exploiting the poor by using monopoly power, by taking advantage of deficiencies in corporate governance, by financial manipulation. Those are things that make our economy weaker, and a major, major source of inequality.
I also object to people who get wealthy by using their political influence to get government to pay more for the goods that they sell to government, like the provision that we passed in the Medicare Part D law that said that the government couldn't bargain with the drug companies.
I do object to the government giving away natural resources at below competitive market prices. That gives rise to some of the mining companies getting lots of riches at the expense of the American taxpayer. So those ways of creating inequality, we are all paying a high price for those.