The Great Divide
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The Great Divide

Unequal Societies and What We Can Do About Them

Joseph E. Stiglitz
W.W. Norton, 2015
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9

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Nobel laureate Joseph E. Stiglitz believes financial inequality undermines the US economy. A former adviser to President Bill Clinton and a critic of President George W. Bush, Stiglitz makes no claim to ideological impartiality. He helped coin the terms “the 1%” and “the 99%” to describe the gap between the ultra wealthy and everyone else. This collection features his writings from Vanity Fair, The New York Times, Politico and other media outlets. As a result, you may find some parts repetitive, but Stiglitz’s sage insights stand out. While always politically neutral, getAbstract recommends his text to investors, CEOs, policy makers, students of business and politics, and all those concerned about the yawning economic gaps in modern society.

Summary

The Top of the Heap

The top 1% of income earners in the United States – especially the top 0.1% – live in a world of private jets, multiple estates and offshore bank accounts. This stands in stark contrast to the daily struggles of millions of Americans who fret about keeping up with the mortgage, saving for retirement, covering unexpected health expenses and paying their children’s college tuition.

Conservatives argue that all Americans can achieve great wealth if they work hard and invest wisely. But the American economy is rigged, and the odds favor the wealthy. Consider this: Mitt Romney, 2012 presidential candidate, would find it hard to spend his entire annual $21.7 million income. He keeps most of that money parked in long-term investments. But typical workers making $43,000 per year have little choice but to spend all their income.

A high concentration of wealth drives down aggregate demand. A more equitable distribution of income creates more spending by those at the bottom, which benefits those at the top. Income inequality isn’t inevitable; it’s a result of deliberate decisions about taxes, regulations and other matters of public policy.

The ...

About the Author

Nobel Prize-winning economist Joseph E. Stiglitz teaches at Columbia University. He is the author of the bestsellers The Price of Inequality, Freefall and Globalization and Its Discontents.

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