Tags: Stiglitz | us | Rich | Russia | Iran | Oligarchs

Stiglitz: US Rich Like Russia, Iran Oligarchs

Tuesday, 26 Jul 2011 08:26 AM

Nobel Prize-winning economist Joe Stiglitz has a stark warning for the top 1 percent of Americans in terms of income: Watch your backs.

That tiny sliver now takes in nearly a quarter of total U.S. income, Stiglitz says. Twenty-five years ago, the upper 12 percent took in a third of income, he writes in Vanity Fair. Upper incomes have risen by 18 percent over the past decade; middle incomes shrank.

That narrowing of interest is the hallmark of Third World-style instability and should be taken seriously, he writes. “All the growth in recent decades — and more — has gone to those at the top,” Stiglitz writes. “In terms of income equality, America lags behind any country in the old, ossified Europe that President George W. Bush used to deride. Among our closest counterparts are Russia with its oligarchs and Iran.”

Joseph Stiglitz
(Associated Press photo)
Fancy rationalizations of concentrated wealth, such as earlier arguments that the rich made more because they contributed more to society, simply don’t hold water, the economist warns. “It is a theory that has always been cherished by the rich. Evidence for its validity, however, remains thin,” Stiglitz writes.

He goes on to detail how rising wealth has put the political class into its own peculiar bubble of irreality. That leads to a breakdown between voters and their rich representatives that no democracy can sustain, he maintains.

“Virtually all U.S. senators, and most of the representatives in the House, are members of the top 1 percent when they arrive, are kept in office by money from the top 1 percent, and know that if they serve the top 1 percent well they will be rewarded by the top 1 percent when they leave office,” Stiglitz writes.

The U.S. Bureau of Labor Statistics recently detailed the unemployment rates by education level.

While the average unemployment rate in 2010 was 8.2 percent, that figure obscured what really happens: College-educated workers were at 5.2 percent joblessness, while those with less than a high school diploma suffer nearly 15 percent unemployment.

Those with professional degrees, like doctors and lawyers, were virtually fully employed, at 2.4 percent unemployment.

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