The short-term memories of those readers old enough to have remembered the burst of the 90s tech bubble, but would sooner forget, are provided by Joseph Stiglitz in his chapter “Why it matters” that history often repeats itself, and sometimes more often than desired. Chapter four continues on the issue of inequality by Stiglitz first pointing out the inherent dangers to our country due to the prevailing economic landscape where increasingly more moneys are being funneled to those needing it the least. He argues that, as it relates to the latest economic downturn—the Great Recession—Keynesian economics was a failure, and similar to the downturn of the 90s it was corporate heads and bankers who were vested in the Fed’s response of reducing interest rates and ideally deregulations that would allow them an even bigger slice of the pie, but on the economic backs of the middle class and the poor. In response to the 2008 recession, new tax cuts were passed but only the rich stood to gain from the generosity of the government.
The tax cuts rammed through Congress at the behest of then President George W. Bush seemed only to have one purpose in mind: to provide the richest Americans with even more opportunity to horde their riches. But while most did so, one of the deleterious effects came by way of a significant reduction in investments, especially those investments that would have perhaps led to positive employment gains for the working class during the period. In fact corporations gorged on the tax reductions, and determined how those responsible for running the show could reap even more money but avoid long-term damages to the company. This point by Stiglitz is quite significant to this writer, because it not only points to a dehumanizing rationale by corporate CEOs and their ilk, but also seems indicative of individuals only having their own self-interests in mind; diverted from the task of being a part of the larger economic landscape that had touched the lives of the rest of America.
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Stiglitz breakneck description of what did take place as the country was embroiled in the worst financial downturn since the Great Depression is profound. His book is not mired in the type of language that only those schooled in economics can appreciate; the book is an attempt to educate laypeople, doing so quite parsimoniously so as not to tax the reader. The approach taken by Stiglitz is appreciated, because while he does not spare those who he feels is responsible for to gross economic inequalities that continue to plague our country, it doesn’t appear that he is also attempting to incite his readers. Chapter 4, if not all sections of his book, provides the details in what almost seems as objective as anyone might get, especially considering the gross malfeasance that was taken place, and is arguably still occurring today. Those who seemingly have emotional and intellectual ties to corporate largesse will perhaps only look at the work of Stiglitz as the ranting of yet another liberal economist who hates the rich and the American Dream, but his writing is what most who have been severely impacted by the latest downturn should take to heart.
Similar to other chapters, the copious nature of Chapter 4 prevents writing on all the issues Stiglitz seems to be indicting corporatists, the rich and politicians of doing but, again, he is attempting to show that by providing all advantages to those who have the most the country is in danger. As regulations are increasingly chipped away and power is ceded to the elites the remainder living in this country, if not the world, are in danger of various degradations, economic, ecological and political. When Stiglitz turns to the issue of higher education it is time that most students should pay attention, because what he is referring to is corporations co-opting the futures of all students who must rely upon financial aid in some manner. The combined effects of an economy holding no promise of employment and a future replete with life-long servitude to pay off student loan debt should be enough to dishearten this, and future generations.
- Stiglitz, J. E. (2013). Why it matters. In The price of inequality (pp. 104-147). New York, NY: WW Norton & Co.
