“The Donald Trump situation, as anxious Republicans and mystified commentators sometimes call it, only grows more anxiety-producing and mystifying by the week. His performance in the August 6 [2015] debate was not considered world-beating. Then, in the wake of it, he was widely perceived as having made reference in a CNN interview to the menstrual cycle of Fox News host and debate moderator Megyn Kelly, which was supposed to finish him off. It was about the fourth such dose of poison but, Rasputin-like, Trump has survived each one.1 After the debate, he maintained his large lead over the field.

FOOTNOTE: “The first three: his reference to Mexican ‘rapists’; his mockery of John McCain’s war heroism; the revelation that he may have once ‘violated’ his then wife Ivana. All washed off him.”

Michael Tomasky, “Trump,” in the New York Review, September 24, 2015, pp: 12-16.

NOBEL PRIZE WINNER JOSEPH STIGLITZ

‘[Joseph] Stiglitz’s emergence as a prominent critic of the current economic order was no surprise. His original Ph.D. thesis was on inequality. And his entire career in academia has been devoted to showing how markets cannot always be counted on to produce ideal results. In a series of enormously important papers, for which he would eventually win the Nobel Prize, Stiglitz showed how imperfections and asymmetries of information regularly lead markets to results that do not maximize welfare. He also argued that this meant, at least in theory, that well-placed government interventions could help correct these market failures. Stiglitz’s work in this field has continued: he has just written (with Bruce Greenwald) Creating a Learning Society, a dense academic work on how government policy can help drive innovation in the age of the knowledge economy.”

James Surowiecki, “Why the Rich Are So Much Richer,” in the New York Review, September 24, 2015, pp: 32-36.

TRIM BACK INCOME INEQUALITY

“[Joseph Stiglitz’s proposed] rules would be good things for the economy as a whole, making it more efficient and competitive. More important, the second half of Stiglitz’s agenda — redistribution via taxes and transfers — remains a tremendously powerful tool for dealing with inequality. After all, while pretax inequality is a problem in its own right, what’s most destructive is soaring posttax inequality. And it’s posttax inequality that most distinguishes the US from other developed countries. As Stiglitz writes:

“ ‘Some other countries have as much, or almost as much, before-tax and transfer inequality; but those countries that have allowed market forces to play out in this way then trim back the inequality through taxes and transfer and the provision of public services.’”

Surowiecki, “Why the Rich Are So Much Richer,” in the New York Review, September 24, 2015, pp: 32-36.

On the tax front, he [Joseph Stiglitz] wants to raise taxes on the highest earners and on capital gains, institute a carbon tax and a financial transactions tax, and cut corporate subsidies. But dealing with inequality isn’t just about taxation. It’s also about investing. As he puts it, ‘If we spent more on education, health, and infrastructure, we would strengthen our economy, now and in the future.’ So he wants more investment in schools, infrastructure, and basic research.

“If you’re a free-market fundamentalist, this sounds disastrous — a recipe for taking money away from the job creators and giving it to government, which will just waste it on bridges to nowhere. But here is where Stiglitz’s academic work and his political perspective intersect most clearly. The core insight of Stiglitz’s research has been that, left on their own, markets are not perfect, and that smart policy can nudge them in better directions.”

James Surowiecki, “Why the Rich Are So Much Richer,” in the New York Review, September 24, 2015, pp: 32-36.

INEQUALITY MAKES IT HARDER TO FIX

“ . . .the political challenge in doing any of this [overcoming income inequality] (let alone all of it) is immense, in part because inequality makes it harder to fix inequality. And even for progressives, the very familiarity of the tax-and-transfer agenda may make it seem less appealing. After all, the policies that [Joseph] Stiglitz is calling for are, in their essence, not much different from the policies that shaped the US in the postwar era: high marginal tax rates on the rich and meaningful investment in public infrastructure, education, and technology. Yet there’s a reason people have never stopped pushing for those policies: they worked. And as Stiglitz writes, ‘Just because you’ve heard it before doesn’t mean we shouldn’t try it again.’”

James Surowiecki, “Why the Rich Are So Much Richer,” in the New York Review, September 24, 2015, pp: 32-36.

AGENDA FOR REDUCING INCOME INEQUALITY

[ Joseph] Stiglitz’s agenda for policy —  which is sketched in The Great Divide, and laid out in comprehensive detail in Rewriting the Rules — relies on both kinds of strategies [predistribution and redistribution of income], but he has high hopes that better rules, designed to curb rent-seeking, will have a meaningful impact on the pretax distribution of income. Among other things, he wants much tighter regulation of the financial sector. He wants to loosen intellectual property restrictions (which will reduce the value of patents), and have the government aggressively enforce antitrust laws. He wants to reform corporate governance so CEOs have less influence over corporate boards and shareholders have more say over CEO pay. He wants to limit tax breaks that encourage the use of stock options. And he wants asset managers to ‘publicly disclose holdings, returns, and fee structures.’ In addition to bringing down the income of the wealthiest Americans, he advocates measures like a higher minimum wage and laws encouraging stronger unions, to raise the income of ordinary Americans (though this is not the main focus of The Great Divide).

James Surowiecki, “Why the Rich Are So Much Richer,” in the New York Review, September 24, 2015, pp: 32-36.

“Strategies for reducing inequality can be generally put into two categories: those that try to improve the pretax distribution of income (this is sometimes called, clunkily, predistribution) and those that use taxes and transfers to change the post-tax distribution of income (this is what we usually think of as redistribution). Increasing the minimum wage is an example of predistribution. Medicaid is redistribution.”

James Surowiecki, “Why the Rich Are So Much Richer,” in the New York Review, September 24, 2015, pp: 32-36.