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Stiglitz: 'American Dream Has Become a Myth'
In an interview with DER SPIEGEL, economist Joseph Stiglitz blasts austerity, slams "economic manipulation" by financial elite
In an interview published Tuesday with German newspaper DER SPIEGEL, noted Columbia University economist and 2001 Nobel Prize winner Joseph Stiglitz says that "the American dream has become a myth" and calls Gov. Romney "emblematic of the top one percent."
Stiglitz highlights the inequality in the U.S. that has grown "dramatically" as wealth is concentrated in the upper echelon because the "marvelous economic machine" in the U.S. reinforces the division. This division is seen in comments like those by Romney disparaging 47% of Americans that show the total disconnect those at the top have with everyone else, according to Stiglitz.
It is "anecdotes" that keep the myth of the American dream alive, says Stiglitz. Yet this dream "is not supported by the data."
Stiglitz slams those who "in the financial sector [who] got rich by economic manipulation and by deceptive" practices, taking advantage of and profiting off predatory systems. Asked by DER SPIEGEL why the government didn't stop these practices, Stiglitz says it's because the financial elite "buy the rules that allow them to make the money."
Stiglitz also addresses what he feels is needed to get out of financial crisis, both in the U.S. and the EU.
A growth strategy is needed, and he says it would be "stupid" for the U.S. not to invest in the future: "We need a growth strategy to stimulate the economy. We haven't invested enough for 30 years -- in infrastructure, technology, education." The austerity path the EU has chosen is destined to fail. It is "absolutely essential" to to switch from austerity to investments, according to Stiglitz, who says that "no eonomy has ever recovered from a downturn through austerity."
Stiglitz says that government spending, not cuts, is necessary to create jobs. While DER SPIEGEL says that this investment can lead to "questionable" return, Stiglitz says that even in less than ideal outcomes the amount pales in comparison to the billions spent bailing out the banks.