Below are just three paragraphs from Nobel Prize-winning author Joseph Stiglitz in his book The Great Divide: Unequal Societies and What We Can Do About Them. What an indictment! Read it.
Thomas Piketty in his magnum opus Capital in the Twenty First Century refers constantly to the United States as “the country with the greatest inequality in the world today,” like the kingdom of some legendary oriental despot. It is not a record we should be proud of.
Of the advanced economies, America has some of the worst disparities in incomes and opportunities, with devastating macroeconomic consequences. The gross domestic product of the United States has more than quadrupled in the last forty years and nearly doubled in the last twenty-five, but as is well known, the benefits have gone to the top—and increasingly to the very, very top.
Last year, the top 1 percent of Americans took home 22 percent of the nation’s income; the top 0.1 percent, 11 percent. Ninety-five percent of all income gains since 2009 have gone to the top 1 percent. Recently released census figures show that the median income in America hasn’t budged in almost a quarter of a century. The typical American man makes less than he did 45 years ago (after adjusting for inflation); men who graduated from high school but don’t have four-year college degrees make almost 40 percent less than they did four decades ago.
American inequality began its upswing 30 years ago, along with tax decreases for the rich and the easing of regulations on the financial sector. That’s no coincidence. It has worsened as we have underinvested in our infrastructure, education and health care systems and social safety nets. Rising inequality reinforces itself by corroding our political system and our democratic governance.