In a recent op-ed in The Guardian, Nobel laureate economist Joe Stiglitz lays out his recipe for America's economic rehabilitation.
"...here is what Americans should hope for: a strong "jobs" bill – based
on investments in education, health care, technology, and
infrastructure – that would stimulate the economy, restore growth,
reduce unemployment, and generate tax revenues far in excess of its
costs, thus improving the country's fiscal position. They might also
hope for a housing programme that finally addresses America's
A comprehensive programme to increase economic
opportunity and reduce inequality is also needed – its goal being to
remove, within the next decade, America's distinction as the advanced
country with the highest inequality and the least social mobility. This
implies, among other things, a fair tax system that is more progressive
and eliminates the distortions and loopholes that allow speculators to
pay taxes at a lower effective rate than those who work for a living,
and that enable the rich to use the Cayman Islands to avoid paying their
America – and the world – would also benefit from a
US energy policy that reduces reliance on imports not just by increasing
domestic production, but also by cutting consumption, and that
recognises the risks posed by global warming. Moreover, America's
science and technology policy must reflect an understanding that
long-term increases in living standards depend upon productivity growth,
which reflects technological progress that assumes a solid foundation
of basic research.
Finally, the US needs a financial system that
serves all of society, rather than operating as if it were an end in
itself. That means that the system's focus must shift from speculative
and proprietary trading to lending and job creation, which implies
reforms of financial-sector regulation, and of anti-trust and
corporate-governance laws, together with adequate enforcement to ensure
that markets do not become rigged casinos.
Stiglitz has long championed redressing America's staggering inequality crisis. In his book, The Price of Inequality, which ought to be a must-read for Canadians too, Stiglitz chronicles how most of American inequality is not merit-driven but the creature of a government, "in which the rich have disproportionate influence – and use
that influence to entrench themselves."
The U.S. government has sacrificed the poor and working classes, blue and white collar, to the benefit of the very richest, effecting since the Reagan era, the most massive, unearned transfer of wealth in America's history, mainly out of the pockets of the middle class and into the portfolios of the rentiers. Reversing this societal disease is the key to kickstarting a progressive restoration.