WashingtonPostmobile.washingtonpost.com | Jun 22nd 2012 Joseph E. Stiglitz, winner of the 2001 Nobel Prize in economics, was chairman of President Bill Clinton’s Council of Economic Advisers and chief economist of the World Bank. He is most recently the author of “The Price of Inequality: How Today’s Divided Society Endangers our Future”
The United States is in the midst of a vicious cycle of inequality and recession: Inequality prolongs the downturn, and the downturn exacerbates inequality. Unfortunately, the austerity agenda advocated by conservatives will make matters worse on both counts.
The seriousness of America’s growing problem of inequality was highlighted by Federal Reserve data released this month showing the recession’s devastating effect on the wealth and income of those at the bottom and in the middle. The decline in median wealth, down almost 40 percent in just three years, wiped out two decades of wealth accumulation for most Americans. If the average American had actually shared in the country’s seeming prosperity the past two decades, his wealth, instead of stagnating, would have increased by some three-fourths.
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