The level of social inequality in the United States is the highest among developed countries

America likes to think of itself as a land of equal opportunity, and many perceive it in the same light. But while we can all cite examples of Americans who have ascended to the top of yourself, in fact you need to focus on the statistics: how much a person's chances in life depend on the income and education of his parents?

At present, these numbers show that the American dream is a myth. In the United States today have less opportunities than in Europe, for that matter, of any other industrialized country for which such statistics are available.

This is one of the reasons why in America the highest level of inequality compared to other developed countries, and the gap is widening. In 2009-2010, the years of "recovery," the top 1% earning an income in the U.S. was 93% of revenue growth. Other measures of inequality — such as wealth, health and life are at the same level, if not worse. A clear trend is observed in the concentration of income and wealth at the top of an erosion of the middle class and the growth of poverty in the lower strata.

It's one thing if a high income tops would be the result of the greatest contributions to society, but the Great Recession has revealed something quite different: even bankers who caused the global economy, as well as their own company to the brink of ruin, received very large bonuses.

A closer look at the top opens the disproportionate role of rent-seeking: some of them got their wealth through the execution of monopoly power, others — is the ultimate guide that took advantage of flaws in the system of corporate governance in order to get themselves excessive share of corporate profits, and still others have used political due to benefit from the bounty of the government — either excessively high prices for what the government buys (medications), or excessively low prices for what the government sells (right to mine mineral resources).

In addition, some of these resources in the field of finance is obtained from the exploitation of the poor, through predatory lending and abuses in lending through credit cards. In such cases, the tip is enriched directly at the expense of those who are at the bottom.

The situation would be better if at least a few breakdowns principle of trickle down — the old idea that all benefit from the enrichment of the top. But for now, most Americans are worse off, with lower real income (adjusted for inflation) than they were in 1997, one and a half decades ago. All the benefits of growth have gone to the top.

Defenders of inequality in America argue that the poor and the middle class should not complain. While they may have received a smaller share of the pie than ever before, the cake was growing so quickly, thanks to the contribution of the rich and super-rich, that the size of a piece is actually increasing.The evidence, again, flatly contradicts this. In fact, America has been growing much faster in the decades after the Second World War, when she grew up, than it is growing since 1980, when it began to grow apart.

Such a situation should not be surprised if you understand the sources of inequality. Rent-seeking distorts the economy.Market forces also play a role, but the markets are formed in politics, and in America, with its kvazikorrumpirovannoy system of financing election campaigns and the revolving door between government and industry, politics is formed with money.

For example, a bankruptcy law that gives a privileged position derivative securities over everything else, but it can not be exempt from payment of student debt, no matter how inadequate it was received education enriches the bankers and impoverishes the lower classes. In a country where money is hitting democracy, such legislation has become predictably frequent.

But growing inequality is not inevitable. There are countries with a market economy, which work to improve both the growth of GDP and living standards of the majority of citizens. Some of them even reduce inequality.

America is paying a high price for the continuation of the movement in the opposite direction. Inequality leads to lower growth and less efficiency. Lack of opportunity means that its most valuable asset — people — not used to the full. Many people from the lower classes, or even the middle class can not reach its full? Potential, because the rich, needing only a few publicly provided services and worried that a strong government can redistribute income, use their political influence to cut taxes and reduce government spending. This leads to insufficient investment in infrastructure, education and technology, which prevents the engine of growth.

The Great Recession has exacerbated inequality, because there was a major reduction in social spending, and the high rate of unemployment had a downward pressure on wages. Moreover, AND The Commission of Experts of the United Nations Reforms of the International Monetary and Financial System, investigating the causes of the Great Recession, and the International Monetary Fund warned that inequality leads to economic instability.

But, most importantly, inequality in America undermines its value and individuality. When inequality comes to such extremes, it is not surprising that its effects are manifested in every government decision, on the conduct of monetary policy to budgetary allocations. America has become a country that is not a "justice for all", and favoritism for the rich and justice for those who can afford it, it is well manifested in the loss of rights to purchase the mortgages at the time of crisis, when the big banks believed that they were not too large only to fail, but also to be involved to justice.

America can no longer, as before, to consider itself a country of equal opportunity. But it need not be: it is too late to restore the American dream.

Joseph E. Stiglitz, a Nobel laureate in economics

project-syndicate.org

See also 10 facts about the financial food chain in the U.S.

Like this post? Please share to your friends: