First, let’s start with some statistics: Over the last 30 to 40 years, every major statistical measure of income inequality in the United States has increased significantly, now approaching the same extreme levels as prevailed before the Great Depression. If you visit inequality.org, the charts speak for themselves.
Over the last third of a century, the income share for the top 1 percent has doubled while the poverty rate has remained the same. The richest Americans have experienced the fastest income growth while middle class incomes have stagnated (imagine if middle class incomes had doubled and what that would mean for home ownership). From 1979 to 2017, worker productivity has increased by 138 percent while worker hourly compensation has increased by only 23 percent. The difference in wealth creation has gone to the top. In 1965, CEOs made 24 times the wages of the average production worker; in 2019, they made 185 times the average salary.
Continue reading “The Case for Progressive Capitalism: A Review of People, Power, and Profits by Joseph Stiglitz”
In this short book of 136 pages, titled On Freedom, Cass Sunstein makes the case that freedom is enhanced by the intentional restriction or gentle manipulation of free choice. Just as a GPS system guides you to the desired destination while preserving your freedom to take an alternate route, “nudges” can point you in the right behavioral direction while preserving your ability to choose otherwise.
A simple example is automatic enrollment in a 401K retirement savings program. This particular “nudge” is beneficial because it helps to overcome two common biases. The “present bias” makes it difficult for people to save for the future, and the “default option bias” makes it difficult for people to make changes to the status quo.
Continue reading “Cass Sunstein on Freedom as a Navigation Problem”
Robert Reich, the former US secretary of labor and professor of public policy at the University of California at Berkeley, outlines his ideas on how to fix the current state of capitalism in his book Saving Capitalism: For the Many, Not the Few. This is a critically important book for a few reasons.
First, it exposes the meaninglessness of the “free market” vs. government intervention debate by showing that the market cannot exist in the first place without the laws, rules, contracts, and enforcement mechanisms that government creates. The relevant debate, therefore, is not between “less government” or “more regulation” but on who exactly stands to benefit or lose under the current arrangements.
Continue reading “Robert Reich on How to Save Capitalism”