Wednesday, Oct 12, 2011 1:40 AM 10:18:57 UTC+1000
What caused the wealth gap
Protesters are furious over America's growing income disparity. Economist Jeffrey Sachs explains where it came from By Alice Karekezi
snips:
For anybody interested in understanding the reasons behind this economic travesty, economist Jeffrey Sachs’ new book,
“The Price of Civilization,” is required reading. In the book, Sachs, who has focused much of his career on the developing world and eradicating global poverty, turns his eye homeward to examine the current economic crisis, tracing its roots not to the housing or financial bubbles of the ’00s, but to a shift in Washington toward smaller government that began in the early ’80s and has yet to be reversed.
snip:
Why the 1970s?
The main effect of globalization, which is known but somehow weirdly separated from our politics, has been that those who have products, or services, or celebrity, or other things that they can sell to world markets, have found a boon in globalization. But for most of American society, and certainly for the majority of Americans who don’t have a bachelor’s degree, globalization has meant facing much lower-wage workers abroad and increasingly powerful competitive pressures. So our society began to separate between the “haves” and the “have-nots,” really in the early 1980s. And while this crucial dynamic was underway, American politics was going in almost the opposite direction.
How so?
Reagan came to office with a diagnosis, most famously put in his inaugural speech, that government is not the solution, but the problem. This was put forward as the reason why the 1970s were so shaky, why we were experiencing more instability. Reagan made a big and wrong diagnosis, with extraordinary consequences, and a lot of the country bought it.
Each of the parties is constantly feeding at the trough of major interest groups. The Democrats, basically, were sold to Wall Street by
Clinton, and they’ve remained in Wall Street’s hands up until now. And that is one of the greatest failings of the Obama administration: the fact that he couldn’t find his way clear of the major interest group that helped bring him to office, and therefore he really couldn’t undertake deeper changes in the country.
snip:
You lay out an extensive plan for climbing out of this crisis. What are some of the steps you propose?
There is no quick fix right now. A quick fix would occur if we had hit a bump in the road of a normally functioning economy, but my point is that we had growing rot that was disguised by financial bubbles. Rebuilding the infrastructure, strengthening the scientific base, having an energy system that moves to a sustainable renewables, low-carbon economy, improving educational outcome so that more kids make it all the way through – those are 10-year projects, more or less. When the started in the mid-1950s it was understood that this was going to take a long time to do but that we were going to make the investment to build a whole national system.
to read full article:
http://news.salon.com/2011/10/11/what_caused_the_wealth_gap/singleton/
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