Joseph Stiglitz on Inequality

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Listen to the EconTalk podcast Joseph Stiglitz on Inequality and consider these questions.

1. Early in the interview, Roberts asks Stiglitz to describe why the current level of inequality in America is so disturbing. Stiglitz offers two main reasons. What are they? To what extent do you find each persuasive?

2. Roberts and Stiglitz both are careful to distinguish between absolute and relative mobility. What is the nature of this distinction, and why is it important?

3. Stiglitz is concerned about the people "in the middle," yet Roberts is skeptical, particularly regarding the 1968 reference point offered by Stiglitz. What is the nature of Roberts' skepticism? To what extent do you agree with Roberts' skepticism?

4. How does Stiglitz define "trickle-down economics," and why does he argue it is a very inefficient way to run an economy?

5. Roberts and Stiglitz agree that certain sectors of the economy are more subject to rent-seeking than others. What does this mean, and to which sectors do they point blame?

6. Stiglitz and Roberts discuss the Federal Reserve and its role in the financial crisis. What reforms does Stiglitz suggest for the Fed? How effective do you believe such reforms could be?

7. What is "cognitive capture," as Stiglitz uses the term? Who are some other possible examples of cognitive capture, and why?

8. Stiglitz, commenting favorably on the stimulus plan, draws a distinction between banking institutions and said institutions' bankers, debt holders, and share holders. What does he mean? What "rules of capitalism" does he accuse these people of violating, and how did they violate them?

9. Why does Stiglitz believe the stimulus was not as effective as it could have been?

10. What are the "automatic stabilizers" Stiglitz advocated as part of the stimulus package? How might the use of such stabilizers have "squared the circle," according to Stiglitz?

11. Discuss who you feel is more optimistic about the U.S. economy--Stiglitz or Roberts.