By National Memo Staff

Weekend Reader: The Price Of Inequality: How Today’s Divided Society Endangers Our Future

April 20, 2013 12:00 am Category: Memo Pad 40 Comments A+ / A-
Weekend Reader: <i>The Price Of Inequality: How Today’s Divided Society Endangers Our Future</i>

This week, Weekend Reader brings you an excerpt from The Price of Inequality: How Today’s Divided Society Endangers Our Future by former World Bank Chief Economist Joseph E. Stiglitz. Stiglitz details the disparity between the top 1 percent who hold 40 percent of the country’s wealth and the remaining 99 percent of Americans, as well as the damaging policies put in place by elected officials that have and will continue to stunt growth and increase inequality. 

You can purchase the book here.

The Rising Tide That Didn’t Lift All Boats

Although the United States has always been a capitalist country, our inequality—or at least its current high level—is new. Some thirty years ago, the top 1 percent of income earners received only 12 percent of the nation’s income. That level of inequality should itself have been unacceptable; but since then the disparity has grown dramatically, so that by 2007 the average after-tax income of the top 1 percent had reached $1.3 million, but that of the bottom 20 percent amounted to only $17,800. The top 1 percent get in one week 40 percent more than the bottom fifth receive in a year; the top 0.1 percent received in a day and a half about what the bottom 90 percent received in a year; and the richest 20 percent of income earners earn in total after tax more than the bottom 80 percent combined.

For thirty years after World War II, America grew together—with growth in income in every segment, but with those at the bottom growing faster than those at the top. The country’s fight for survival brought a new sense of unity, and that led to policies, like the GI Bill, that helped bring the country even closer together.

But for the past thirty years, we’ve become increasingly a nation divided; not only has the top been growing the fastest, but the bottom has actually been declining. (It hasn’t been a relentless pattern—in the 1990s, for a while, those at the bottom and in the middle did better. But then, as we’ve seen, beginning around 2000, inequality grew at an even more rapid pace.)

The last time inequality approached the alarming level we see today was in the years before the Great Depression. The economic instability we saw then and the instability we have seen more recently are closely related to this growing inequality, as I’ll explain in chapter 4.

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How we explain these patterns, the ebb and flow of inequality, is the subject of chapters 2 and 3. For now, we simply note that the marked reduction in inequality in the period between 1950 and 1970, was due partly to developments in the markets but even more to government policies, such as the increased access to higher education provided by the GI Bill and the highly progressive tax system enacted during World War II. In the years after the “Reagan revolution,” by contrast, the divide in market incomes increased and, ironically, at the same time government initiatives designed to temper the inequities of the marketplace were dismantled, taxes at the top were lowered and social programs were cut back.

Market forces—the laws of supply and demand—of course inevitably play some role in determining the extent of economic inequality. But those forces are at play in other advanced industrial countries as well. Even before the burst in inequality that marked the first decade of this century, the United States already had more inequality and less income mobility than practically every country in Europe, as well as Australia and Canada.

The trends in inequality can be reversed. A few other countries have managed to do so. Brazil has had one of the highest levels of inequality in the world—but in the 1990s, it realized the perils, in terms both of social and political divisiveness and of long-term economic growth. The result was a political consensus across society that something had to be done. Under President Fernando Henrique Cardoso, there were massive increases in education expenditures, including for the poor. Under President Luiz Inácio Lula da Silva, there were social expenditures to reduce hunger and poverty. Inequality was reduced, growth increased, and society became more stable. Brazil still has more inequality than the United States, but while Brazil has been striving, rather successfully, to improve the plight of the poor and reduce gaps in income between rich and poor, America has allowed inequality to grow and poverty to increase.

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Weekend Reader: The Price Of Inequality: How Today’s Divided Society Endangers Our Future Reviewed by on . This week, Weekend Reader brings you an excerpt from The Price of Inequality: How Today's Divided Society Endangers Our Future by former World Bank Chief Econom This week, Weekend Reader brings you an excerpt from The Price of Inequality: How Today's Divided Society Endangers Our Future by former World Bank Chief Econom Rating:

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Comments

  • Mike l

    President Obama speaks for all from his heart and he will unite the people to move forward and our prayers are with the victims and people of Boston. You will run again

  • http://www.facebook.com/dominick.vila.1 Dominick Vila

    Hopefully, the second terrorist will be caught soon. While details are not yet known, it seems clear, judging by their attire and physiognomy, that they are Mediterranean. They may be European or from countries such as Lebanon, Syria, Turkey or Libya. They were, most likely, students and one of the famous universities in the area.

    • http://www.facebook.com/profile.php?id=1362702462 Madelaine Ayers Henne

      Wrong, Russian and US citizens!

      • larry

        not citizens, green card holders

        • idamag

          They were citizens. They came here with their uncle as political refugees. They were naturalized.

    • http://www.facebook.com/profile.php?id=1362702462 Madelaine Ayers Henne

      Sorry but you were jumpimg to conclusions and that is so not like your posts.

    • howa4x

      They were from southern Russia, either Kazakhstan or Chechnya. Both were Muslims

      • idamag

        They were naturalized American citizens. Both of them came to this country as children. They were 14 and 9. The older one returned to Russia for 6 months and people who knew him said he came back a rabid fanatic. The younger one followed his lead. They joined the Muslim religion after the older one returned fro Chechen. With the break up of the USSR, Chechen became an independent entity.

  • stcroixcarp

    These senators who voted no and the NRA support and condone providing guns to murderers, robbers, rapists, gang bangers, drug dealers, spouse and child abusers, neo nazis, terrorists and the insane. Shame on you.

    • Lovefacts

      They’re the puppets of the gun/weapon manufacturers.

  • JDavidS

    This is in no way an infringement on anyones’ 2nd amendment rights. If you’re bat-shit crazy, a convicted felon, have threatened physical harm toward anyone or have a proclivity toward violence, there isn’t a sane person anywhere that would think you should own a gun. LaPierre and his fellow NRA loons simply don’t want any restrictions on gun sales, and therefore, profits for the manufacturers and kick-backs for themselves.

  • howa4x

    Republican Senators: Best that NRA money can buy

  • Independent1

    The Gun Lobby is really hoodwinking the public. Here are some actual crime and gun usage statistics that show the Gun Lobby is greatly exaggerating the need and effectiveness of owning a gun:

    The gun lobby claims that people must carry guns to protect themselves from being killed by criminals; but facts show that most homicides occur between people who know each other and don’t occur in situations where someone is expecting to have to protect themself. So, for example, of the homicides that occurred in America during 2010, less than 3% were justifiable homicides for the cause of self- defense.

    The gun lobby also would like Americans to believe that guns are used about 2.5 million times a year for self-defense; but according to the Department of Justice’s National Crime Victimization Survey, the actual number is just a fraction of that; being again less than 3% of the gun lobby’s grossly inflated number (actually less than 75,000 times – nowhere near 2.5 million).

    Also, of about 30 million crime victims recorded for the years 2007-2011, less than 1% of the victims were actually able to find and use a gun for self-defense purposes: that means out of 30,000,000 crime victims, less than 300,000 were actually able to protect themselves with a gun; even though Americans own around 300 million guns.

    And finally, in any given year, far more Americans have their guns stolen, about 230,000, than are ever able to use their gun to defend themselves, less than 75,000 out of about 75 million crime victims. Pretty sad isn’t it for all the hype the NRA puts out; and especially considering all the mass killings America has suffered the past decade that were committed by killers who couldn’t have purchased the guns they used and therefore were only able to use a gun to kill a lot of people because they stole the gun from a
    relative.

  • charleo1

    Re: Price of inequality. President Obama says, he believes the Country
    is better off, more prosperous, and has more opportunities for education,
    and advancement, when the economy grows from the middle out, and
    not the top down. And, I think most people agree with that. For one
    reason, many Americans need not look back very far into our past, to
    have witnessed, and taken part in building the Middle Class. Which in
    turn, by that general, broad based, prosperity, created an economic
    engine that not only fueled the expansion of our own economy, but lifted
    other economies around the world. And to the extent that we have
    gotten away from that over the past 30 years, rank, and file labor,
    along with the U.S. economy in general, has suffered the consequences.
    Globalization, investment, one billion, and a dollar, twenty-five cents.
    This is one equation America had better get right. One billion is the number
    of people on this planet that survive on $1.25 a day. And, cheap labor is
    the reason an investment made there, returned 3X as much profit as an
    investment made here. Between the years 2000, and 2010, Americans
    suffered the loss of more than 10 million jobs in manufacturing. Jobs with
    healthcare. Jobs that bought cars, and homes. And sent kids to college.
    Jobs, that helped create, and support other jobs for other families. That’s
    the way it worked at one time. Today, incomes at the high end are soaring.
    Corporate profits have never been higher. But, most Americans are not the
    beneficiaries of these unprecedented gains. GM sold more cars in China,
    in 2011, than here, in the land of the stagnant wages. It was the first year
    since automobiles were invented, another Country had bought more cars
    than the U.S. I have no summation, because I believe there is much history
    yet to be written about America. The richest, freest, and most dynamic
    Country, the world has ever seen. But, we do need to start making better
    decisions. Especially as it pertains to jobs, wages, and trade policy.

  • http://www.facebook.com/philip.hofer Philip M. Hofer

    Not to call this post idiotic, but it is. The pressure cooker bombs needed only something as simple as gun powder, which is charcoal salt peter some potassium, which is found pretty much in everyday environments (not necessarily suburbia). The point is, you cannot TAG that stuff, the chemical makeup is too basic. Science is fun isn’t it?

    • idamag

      I don’t know, I heard one FBI person say that gunpowder can be marked as to where it was manufactured and sold. Everything we can give law enforcement to solve crimes is a plus.

  • http://www.facebook.com/glenda.heavrin.1 Glenda Heavrin

    where is our dollar now? is it worth a dollar now that we print money. china is going about buying up gold and silver. is our dollar going to be worth anything or are they going to come up with another type global dollar? we have bought everything from them for so long they are now rich more so than us. what can we suspect out of them. are they going to pay us back what we did for them?

  • idamag

    Despite the ugly rhetoric, from Sarah “pit bull, mama grizzly, Sarah Palin; If there are only have a lots, and have nones, it sparks civic unrest. That very disparity caused Germany to follow a nut into perdition. We not only need producers, we need consumers. When one faction has it all, another faction is going to have nothing. This is what started the French Revolution and the Chinese Revolution. China turned to Communism.

  • tax payer

    Any person can buy a weapon and than say it was stolen, so it defeats the purpose of having to check someone before they buy a weapon.

  • charleo1

    It’s always the same answer with you guys. More guns. bigger guns.
    Guns, guns, guns! Maybe an armed teacher could have saved some
    children. But, why would we expect a teacher to be able to do such
    a thing? We hire teachers to teach, not win gun fights. Maybe next
    time it will be a school bus. And your answer will be, if only the driver
    was armed. Or a super market, and if only the cashier was packing.
    No. You’re the fool here. Only people that have no problem with the
    fact, we are turning this Country into an armed camp, are the fools.
    Only fools think we must allow criminals, or terrorist, or the mentally
    deranged, to be able to buy a gun, just as easily as any Responsible,
    law abiding citizen, is the only way their Rights to own a gun is protected.
    And, only a fool listens to the NRA, shills for the gun lobby, and believes
    it’s all about his Constitutional Rights. And not the profits of the gun
    manufactures.

  • John Knauf

    When was the last time you tried to outdraw and outshoot an assailant coming at you with a gun? How many “bad guys” have you personally faced down in this fashion? Do you have a long history of doing that? (And I don’t mean long-range, battlefield conditions). Do you think maybe the adrenalin rush would make your hands shake and, in your frantic rush to defend yourself, you might miss? Go to a gravel pit and try it. Remember, you only get one shot – the second one is the bullet that kills you. Let us know how it works out. Better yet, send a video of your “deadeye” marksmanship so we can all witness it rather than having to take your word for it.
    By the way, you need some remedial grammar in English. “Your all fools” should be “You’re all fools.”

  • http://www.facebook.com/profile.php?id=1362702462 Madelaine Ayers Henne

    Do you have these answers memorized?? They never change! How do you know how you would react in the same situation! You guys are all alike! A gun is your answer to everything! I hope you don’t have kids!

  • JDavidS

    Yeah, you’re a hero when you’re shooting at something that is stationary and isn’t shooting back at you. When you’ve got someone shooting back, that changes the whole scenario, Skippy. It’s nothing like all the John Wayne movies you clowns fantasize about.

  • http://www.facebook.com/spookpekes2 LaRae Bailey

    well said, all gun free zones are targets and victims waiting to happen. I notice none of the anti gunners look up any information of their own, they just repeat the lies of the government and local news who the govt dictates too. the armed citizens are much safer than those who rely on the cops to protect them, the high rate of murder by guns are gang bangers who you will never disarm any more than the drug war has slowed down the drug trade. the majority of gun buyers who attend gun shows are legal gun owners looking for a bargain the stores do not offer, or old hard to find collectible guns. There are current laws on the books to make doctors give up names of dangerous people to the atf to get them on a do not sell to list, which is not enforced. Most people do not want the govt in their medical records, do you? with the law as written anyone who had ever taken a sleeping pill or anti depresant would be disqualified.. nothing right or just about it. most people would fail. many doctors prescribe anti depressants as a form of pain control drugs, but then no gun ownership.. not right by any measure. the real story here is Obama wants to sign the UN TREATY which states all citizens must be disarmed.. sound like gun control? sure is. the law to ensure everyone do a background check would have required a gun registration, which would no doubt eventually lead to confiscation. you say not? no smoking in resturants led to no smoking in public anywhere in just a few short years, where is the equal rights for all in that? our govt has an agenda all of its own and disarming us all is a big part of it. We would have supported better sentencing for criminals using guns, buying guns, mentally ill using guns, decent laws that would help prevent crime, but not at the cost of our constitutional rights, or the right to own as many guns as we can afford or want to own. once the constitution is picked apart bit by bit america is done and doomed. As for the NRA they are only for the support of the second amendment to be used as it was intended in its full form, and the education of firearms safety, the shooting sports programs it supports, the boys scouts, girl scouts, kids gun safety EDDIE EAGLE PROGRAM, and instructor training. many of which are free programs

  • howa4x

    You are the biggest fool!! there were armed guards at Columbine High and the massacre took place on the opposite side of the school, same with Va Tech they had an armed police force. If the guns are kept in a locked cabinet in the principals office, and she is killed 1st like at Sandy Hook then what. Does every teacher need to carry a hand gun? Why don’t we just give the 6 year olds guns? Maybe they can play cops and robbers on the playground with them.

  • Lovefacts

    Unless that teacher had training in close combat and their weapon was readily available and didn’t have a lock–which being a school it would–their having a weapon in a locked drawer or their purse won’t make any difference to the outcome. Just as having an armed guard–who was the first person shot dead–didn’t make any difference at Columbine. The only thing that might help is universal checks prior to the purchase of a weapon.

  • idamag

    I read something written by a member of a swat team. He doubted that very much.

  • http://www.facebook.com/profile.php?id=1362702462 Madelaine Ayers Henne

    Well said! I also want to see that video!!

  • http://www.facebook.com/spookpekes2 LaRae Bailey

    you are so sweet to point out grammar, as for the other, one chance to defend myself is a much better deal than no chance in hell. you ever been raped or beat and left for dead? How about your family? I prefer a shotgun myself but will use any weapon at hand since the closest cops would be a minimum of 30-45 minutes away. all is over by then. now feel free to comment on my grammar too

  • idamag

    Time magazine had a feature, written by a seasoned policeman. They are trained and psyched. He said when adrenalin kicks in the brain kicks out. With his swat team training, he even had problems. He said all policeman have had problems at times when it is a life or death situation and it is the policeman’s life. I would rather take the word of an expert than a dirty harry wannabe.

  • http://www.facebook.com/spookpekes2 LaRae Bailey

    why not, we allow stupid drivers the right to buy cars and drive? they kill far more people every year than guns do. We allow drug users to sell drugs to our kids and do nothing about it?? we also allow our govt officials to lie, cheat us, and steal from us every year and do nothing.. we allow millions of illegals to invade our country as criminals every year and we support them with every free program there is? you think these illegals are not huge part of the gun problem? the drug problem? the welfare problem? the high tax rate problem? we allow stupid people who can not even read and write to graduate from high school? and to vote when they can not read what they are voting on? Our citizens are going to allow the gang of 8 to vote in the amnesty bill which will be the end of this country as we know it and cost us trillions in tax money.. guns are not the problem here and either are the laws, it is the cops and courts who do nothing to deport the illegals, to stop the judges from turning them loose, us for allowing our elected officials to destroy this country. the gangs are the biggest of the criminals doing the killing they do not buy their guns at shops or gun shows, but steal them and never will they be without guns or drugs until wiped out by law enforcement. the mass killings were done by mentally ill who did not buy their guns either.

  • http://www.facebook.com/spookpekes2 LaRae Bailey

    It is because I have kids I am a gun owner unafraid to use it

  • charleo1

    Your post essentially says, why are we concentrating on
    gun control, when heart disease, and cancer kills far more
    people than guns? We let stupid drivers have cars. We also
    register those cars, and require a proficiency test before a
    license is granted. And, we suspend, or revoke millions
    of those licenses each year, if the person demonstrates they
    are not capable of driving responsibly. And the fact we have
    the largest incarceration rate, per capita, of any Country in
    the world. And half are there, due to drug convictions. Is not
    exactly allowing drug users to sell dope to our kids. Nor, do
    we, allow millions of illegal immigrants to come each year.
    The facts are, the Country has deported more undocumented
    aliens in the first 4 years, under Obama, than all 8 of the Bush
    years. And where did you get the impression, that unlike any
    other law ever passed, since the Country’s beginning. Immigration
    reform is going to be written, then passed into law, by only
    8 people. Sadly, it seems to me, you’ve been getting information
    from sources trying to outrage you. Whereas, the true facts,
    would lead you to have a very different conclusion. For example,
    you seem not to know 4 out of every 10 guns purchased are not
    subject to a background check. Yes, criminals sometimes steal
    guns from cars, homes, businesses. And no law is going to be
    100%. But, that is no excuse for the gun show loophole. To use
    your analogy. If you registered, and insured your car, and got
    the proper license to operate it. But there was another route
    available to drivers with a bad record. If they buy their car from
    an individual, instead of a car dealer. In that case, they need
    not have a license, register, or insure their car. Just hop in, no
    questions ask. Does that sound smart, or stupid to you? Oh, I
    almost forgot. Cho Seung-Hui, the killer at Virginia Tech, did
    purchase the guns he used. Although, he had been treated
    extensively for mental problems, he was able to pass his background check, because a person’s prior treatment for mental problems,
    is, by law, forbidden to be shown on his check.
    Does that sound smart, or stupid to you? Or, do you just want to
    oppose all this, because that’s what you always do, if Democrats,
    or Obama supports a thing?

  • howa4x

    Your facts are off. Gun deaths topped 30,000 this year. More than motor vehicle deaths. Since JFK was killed by a sniper over 1 million deaths happened from gun violence in the united states. These are all facts. Another fact is that most gangs get their guns from so called honest law abiding citizens. Straw purchasers buy 10 guns at a show and sell them to gangs or trade guns for drugs as happens between Pa and NJ’s urban areas, another fact by the way

  • idamag

    We register cars and license drivers.

  • John Knauf

    Okay, I will. You didn’t capitalize a single word at the start of any sentence. As for your “point,” I’ve been a shooter and gun owner my entire life, ever since I was in grammar school. All kinds of guns – rifles, handguns, single shot, semi-auto, you name it, I’ve used it. How about you? What’s the extent of your experience with guns? Ever tried the old “quick draw” technique and seen how much like John Wayne you really are?

    Having said that, understand this: I agree with you about having a gun available for self defense since, as you correctly pointed out, the police will not be able to help you if it comes to that. And I agree that a shotgun would be the weapon of choice (12-gauge, pump action, cut down for easy handling).

    But here’s my point: unless all those teachers actually have the necessary training and experience, and have the nerves of combat veterans as well, arming them is no solution. They certainly can’t walk around the halls with shotguns, and holstered handguns will sooner or later end up misplaced, stolen, lost, or even used by students on other students. Embedded agents, armed and trained, might work, but think about what we’re saying: your SCHOOL is now an armed camp.

    The answer CANNOT be “there is no answer” except more guns. And this is coming from a guy who is liscenced to carry one.

  • idamag

    How many times have you been raped and beaten and left for dead?

  • ralphkr

    Hmmm, howa4x, you just may have come up with the answer to the problem of too many people living long enough to collect Social Security.

  • plc97477

    It is my belief that we do not pay teachers anywhere near enough to make them police as well as teachers.

  • plc97477

    I hope at least you keep them locked up where your kids can’t get to them.

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