Income inequality has become the subject of much debate in this country, in large part because of the Occupy Wall Street movement.

In his latest book, The Price of Inequality, Columbia Professor and Nobel laureate Joseph Stiglitz examines the causes of income inequality and offers some remedies. In between, he reaches some startling conclusions, including that America is "no longer the land of opportunity" and "the 'American dream' is a myth."
While we all know stories of people who've moved up the social stratosphere, Stiglitz says the statistics tell a very different story. In the last 30 years the share of national income held by the top 1% of Americans has doubled; for to the top 0.1%, their share has tripled, he reports. Meanwhile, median incomes for American workers have stagnated.

Even more than income inequality, "America has the least equality of opportunity of any of the advanced industrial economies," Stiglitz says. In short, the status you're born into — whether rich or poor — is more likely to be the status of your adult life in America vs. any other advanced economy, including 'Old Europe'.
For example, just 8% of students at America's elite universities come from households in the bottom 50% of income, Stiglitz says, even as those universities are "needs blind" — meaning admission isn't predicated on your ability to pay.

"There's not much mobility up and down," he says. "The chances of someone from the top [income bracket] who doesn't do very well in school are better than someone from the bottom who does well in school."
Because the children of those at the top of society tend to do better than those at the bottom — thanks, in part, to better education, health care and nutrition — the income inequality that's slowly emerged over the past 30 years will only widen in the next 10 to 20 years.

If the root causes of income inequality go unaddressed, America will truly become a two-class society and look much more like a third world economy, Stiglitz warns. "People will live in gated communities with armed guards. It's a ugly picture. There will be political, social and economic turmoil." (Hence the book's subtitle: 'How Today's Divided Society Endangers Our Future')

The good news is Stiglitz believes this "nightmare we're slowly marching toward" can be avoided, citing Brazil's experience since the early 1990s as an example of a country that has reduced income inequality. Among other things, he recommends improving education and nutrition for those at the bottom of society, and eliminating "corporate welfare" and other policies which "create wealth but not economic growth."

For example, he cites the provision in Medicare Part D which forbids the federal government from negotiating prices with the drug companies. Over 10 years, that rule will generate approximately $500 billion for the industry, he estimates, but no tangible benefit for taxpayers or the economy as a whole.
Importantly, Stiglitz believes inequality of wealth and opportunity are hurting the overall economy, by limiting competition, promoting cronyism and keeping those at the bottom from reaching their potential.

"What I want is a more dynamic economy and a fairer society," he says, suggesting income inequality is ultimately detrimental to those at the top, too. "My point is we've created an economy that is not in accord with the principles of the free market."


http://finance.yahoo.com/blogs/daily-ticker/american-dream-myth-joseph-stiglitz-price-inequality-124338674.html

Only a Professor from a liberal college believe that the only way to get ahead is to do well in school. A college education is a good thing to have but your GPA is not a good predictor of success in life. People skills and hard work and the willingness to take risk are more important. If you think borrowing $100K to attend Columbia will make you successful in life you are probably going to be disappointed.

Aringarosa: Only a Professor from a liberal college believe that the only way to get ahead is to do well in school. A college education is a good thing to have but your GPA is not a good predictor of success in life. People skills and hard work and the willingness to take risk are more important. If you think borrowing $100K to attend Columbia will make you successful in life you are probably going to be disappointed.

+10000

Aringarosa: Only a Professor from a liberal college believe that the only way to get ahead is to do well in school. A college education is a good thing to have but your GPA is not a good predictor of success in life. People skills and hard work and the willingness to take risk are more important. If you think borrowing $100K to attend Columbia will make you successful in life you are probably going to be disappointed.

Very true. Just as standardized testing is an inaccurate predictor of success in higher education. It is in the ability to understand how to apply knowledge that makes people successful. This understanding can exist at all levels of society.

Aringarosa,

I hope Nigerians, and Africans generally, are reading your response. Education is invaluable but applying yourself productively is far more invaluable. Heart to GOD, hands to work!

@Post

I agree with most of the article and with what Stiglitz had to say. America used to be the land of opportunities but not anymore. Ever since 9/11, the continous war in Iraq and Afghanistan and the global economic recession, america just like europe has been heading down a slippery slope. However, like other posters before me have rightly stated, education alone will not guarantee you a better life. I know of people who have advanced college degrees but could not get a job because they were deemed over qualified. I know quite a few people who were qualified for a position but it was given to someone else due to race, nationality or because they had the connections.

America is already becoming a third world country because the flambouyant middle class is fast disappearing leaving just the poor or rich. Most americans are in serious debt, many are losing their homes to foreclosure, most live paycheck to paycheck and believe it or not, many americans are now leaving their country to places like Hong Kong, Saudi Arabia, China and the likes to take up employment. The 'american dream' like Stiglitz rightly said is a myth, an illusion and just like Nigeria, america is fast going to the dogs.

dasparrow: @Post

I agree with most of the article and with what Stiglitz had to say. America used to be the land of opportunities but not anymore. Ever since 9/11, the continous war in Iraq and Afghanistan and the global economic recession, america just like europe has been heading down a slippery slope. However, like other posters before me have rightly stated, education alone will not guarantee you a better life. I know of people who have advanced college degrees but could not get a job because they were deemed over qualified. I know quite a few people who were qualified for a position but it was given to someone else due to race, nationality or because they had the connections.

America is already becoming a third world country because the flambouyant middle class is fast disappearing leaving just the poor or rich. Most americans are in serious debt, many are losing their homes to foreclosure, most live paycheck to paycheck and believe it or not, many americans are now leaving their country to places like Hong Kong, Saudi Arabia, China and the likes to take up employment. The 'american dream' like Stiglitz rightly said is a myth, an illusion and just like Nigeria, america is fast going to the dogs.

yeah as pertains to isaiah chapter 14. thats a chapter about the downfall of america. read it if you have the time. very informative.

buzugee:

yeah as pertains to isaiah chapter 14. thats a chapter about the downfall of america. read it if you have the time. very informative.

I don't care about this article, but it will be foolhardy to ignore any assignment given by the venerable Wooli Buzugee.

My kemetic Oga, how is the weather on the mountain?? You saw all these before that over-educated professor.

Please bring us more revelations sir

CLASS WARFARE at it's finest!