by Charles Lemos, Wed Sep 01, 2010 at 07:47:33 PM EDT
Why Joseph Stiglitz isn't in the Administration is beyond me. In this lecture given at the University of Queensland in Brisbane, Australia in late July, Dr. Stiglitz puts the blame squarely for our economic meltdow squarely where it needs to be placed: on Ronald Reagan and his free market and low taxation policies that have redistributed wealth upwards. He argues that "trickle up economics" created the credit bubble that triggered the recent financial crisis. "There was a party going on, and nobody wanted to be a party-pooper," says Stiglitz.
Since 1976, 58 percent of all income gains have accrued to the top one percent of US households. Meanwhile, 25 percent of American workers earn a wage that puts them at or below the poverty level. If the redistribution upwards since 1981 had not taken place, if the average American family in the bottom 90 percent were today getting the same share of the nation's income as the average bottom 90 percent family received in 1973 when income distribution was much more egalitarian, this average family would now be taking home in income over $10,000 more per year. The wealth of the top tenth has come by impoverishing the bottom 90 percent. That's the legacy of Ronald Reagan.
Joseph Stiglitz was chief economist at the World Bank until January 2000. Before that, he was the chairman of President Clinton's Council of Economic Advisers. He was awarded the Nobel Prize in economics in 2001. He is currently a finance and economics professor at Columbia University. He is the author of Globalization and Its Discontents and The Roaring Nineties. The full hour long lecture plus a 30 minute Q&A session is available at Fora TV.