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	Some are more Unequal than Others by Joseph E. Stiglitz Columbia University USA   October 2012   With the normally conservative magazine The Economist publishing a special series showing the extremes to which American inequality has grown — joining a growing chorus (of which my book “The Price of Inequality” is an example) arguing that the extremes of American inequality, its nature and origins, are adversely affecting our economy — it is an issue that not even the Republicans can ignore. It is no longer just a moral issue, a question of social justice.   This perhaps provides part of the explanation for why inequality and poverty should suddenly appear as part of the Romney-Ryan makeover, as they attempt to portray themselves (to use a phrase of some 12 years ago) as compassionate conservatives. In Cleveland, Paul Ryan gave a speech that might lead one to conclude that the two Republican candidates were really concerned about poverty. But more revealing than oratory are budget numbers — like those actually contained in the Ryan budget. His budget proposal guts programs that serve those at the bottom, and little could have done more to enrich those at the top than his original tax proposals (like the elimination of capital gains taxes). Every other advanced country has recognized the right of everyone to access to health care, and extending access was central to President Obama’s health care reform. Romney and Ryan have criticized that reform, but have said nothing about how or whether they would ensure universal access. Most important, the consequences of the Romney-Ryan economic program would be devastating: growth would slow, unemployment would increase, and just as Americans would need the social protection of government more, the safety net would be weakened.   We’d all do well to pay a bit closer attention. That American inequality is at historic highs is undisputed. It’s not just that the top 1 percent takes in about a fifth of the income, and controls more than a third of the wealth. America also has become the country (among the advanced industrial countries) with the least equality of opportunity. Meanwhile, those in the middle are faring badly, in every dimension, in security, in income, and in wealth — the wealth of the typical household is back to where it was in the 1990s. While the recession has made all of this worse, even before the recession they weren’t faring well: in 2007, the income of the typical family was lower than it was at the end of the last century. While Obama may not have done as much as he should to counteract the steep downturn he inherited from George W. Bush upon taking office — and he underestimated the depth of the problems that had been passed along to him — he did far more than his predecessor. And he could have done far more, as the dimensions of the problem became clearer to everyone, had he not faced such strong Republican opposition in Congress.   There are many forces giving rise to this high and rising inequality. But the fact that America’s inequality is greater than other advanced countries’ says that it’s not just market forces. After all, other advanced countries are subjected to market forces much like those confronting us. Markets don’t exist in a vacuum. Government policies — or their lack — have played a critical role in creating and maintaining these inequities.   Inequality in “market incomes” — what individuals receive apart from any transfers from the government — has increased as a result of ineffective enforcement of competition laws, inadequate financial regulation, deficiency in corporate governance laws, and “corporate welfare” — huge open and hidden subsidies to our corporations that reached new heights in the Bush administration.   When, for instance, competition laws are not enforced, monopolies grow, and with them the income of monopolists. Competition, by contrast, drives profits down. What is disturbing about the Republicans , represented by Romney and Ryan is that they have done so little to distance themselves from the economic policies of the Bush administration, which not only led to poor economic performance, but also to so much inequality.   Understandably, perhaps, Romney has not explained why those, like him, in the hedge fund and equity fund business should be able to use a loophole in the tax law to pay 15 percent taxes on their earnings, when ordinary workers pay a far higher rate.   Our government does less to correct these inequalities than we did in the past, or than other countries do, and as disparities in “market” incomes have increased, its efforts have diminished. It’s not just a matter of redistribution, as some suggest. It’s in part a matter of ensuring that those at the top pay a fair share of their taxes.   And it’s in part a matter of ensuring that those at the bottom and in the middle get a fair start in life, through access to education, adequate nutrition and health, and not being exposed to the environmental hazards that have come to plague many of our poor neighborhoods.   But Romney’s campaign likes to play tricks with numbers. When he unleashed a tirade against the bottom 47 percent of supposedly freeloading Americans (for which he has since apologized), he failed to note what should have been obvious and has been pointed out repeatedly since he made that remark: those Americans do pay large amounts in taxes.   These include (and I’m hardly the first to point this out) payroll taxes, sales taxes, property taxes, excise taxes, and even part of the corporate income taxes that our major corporations manage to pass on to their customers.   He failed to note, too, the many older Americans barely above poverty who receive social security payments, for which they contributed through a lifetime of work. Yes, the rich may pay a high and increasing share of the country’s total tax revenue, but that’s only because they have a high and increasing share of our national income— not because their rates have gone up.   Many of the very rich, like Romney, are avoiding taxes because of numerous loopholes that favor the rich, and capital gains taxes that are taxed at less than half the rate of other income. The 14 percent rate Romney reportedly paid on his income last year is well below that of Americans of comparable income who worked for their money doing things like creating a real business. Tax havens like the Cayman Islands (condemned by the Group20 and all economic experts) facilitate another level of tax avoidance.   That the practice is legal is not an economic justification — the loopholes that allow it were put in place by the rich and the bankers, lawyers and lobbyists who serve them so well.   Putting all this together isn’t the politics of envy, as Romney’s camp likes to complain, or even about shaking a finger at the country’s real freeloaders. It’s about cold, hard economics. Tax avoidance and low rates on capital gains — and the inequality they amplify — are weakening our economy. Were the rich paying their fair share, our deficit would be smaller, and we would be able to invest more in infrastructure, technology and education — investments that would create jobs now and enhance growth in the future.   While education is central to restoring America as a land of opportunity, all three of these are crucial for future growth and increases in living standards. Tax havens discourage investment in the United States. Taxing speculators at a lower rate encourages speculation and instability — and draws our most talented young people out of more productive endeavors. The result is a distorted, inefficient economy that grows more slowly than it should.   The Conservatives campaign, however, has defended inequality or brushed it aside. To do so, it has employed a handful of economic myths. Here are a few of the most important:   (1) America is a land of opportunity. While rags-to-riches stories still grip our imagination, the fact of the matter is that the life chances of a young American are more dependent on the income and wealth of his parents than in any of the other advanced countries for which there is data. There is less upward mobility — and less downward mobility from the top — even than in Europe, and we’re not just talking about Scandinavia.   (2) Trickle-down economics works (a k a “a rising tide lifts all boats”). This idea suggests that further enriching the wealthy will make us all better off.   America’s recent economic history shows the patent falsehood of this notion. The top has done very well. But median American incomes are lower than they were a decade and a half ago. Various groups — men and those without a college education — have fared even worse. Median income of a full-time male worker, for instance, is lower than it was four decades ago.   (3) The rich are the “job creators,” so giving them more money leads to more and better jobs. This is really a subset of Myth 2. But Romney’s own private sector history gives it the lie. As we all know from the discussion of Bain Capital and other equity firms, many made their money not by creating jobs in America but by “restructuring,” “downsizing” and moving jobs abroad, often using debt to bleed the companies of money needed for investment, and using the money to enrich themselves.   But more generally, the rich are not the source of transformative innovations. Many, if not most of the crucial innovations in recent decades, from medicine to the Internet, have been based in large measure on government-financed research and development.   The rich take their money where the returns are highest, and right now many see those high returns in emerging markets. It’s not a surprise that Romney’s trust fund invested in China, but it’s hard to see how giving the rich more money — through more latitude to escape taxation, either through low taxes in the United States or Cayman Islands hide-aways — leads to a stronger American economy.   (4) The cost of reducing inequality is so great that, as much as idealists would like to do so, we would be killing the goose that lays the golden egg. In fact, the engine of our economic growth is the middle class. Inequality weakens aggregate demand, because those at the middle and bottom have to spend all or almost all of what that they get, while those at the top don’t.   The concentration of wealth in recent decades led to bubbles and instability, as the Fed tried to offset the effects of weak demand arising from our inequality by low interest rates and lax regulation. The irony is that the tax cuts for capital gains and dividends that were supposed to spur investment by the wealthy alleged job creators didn’t do so, even with record low interest rates: private sector job creation under Bush was dismal.   Mainstream economic institutions like the International Monetary Fund now recognize the connection between inequality and a weak economy. To argue the contrary is a self-serving idea being promoted by the very wealthy.   (5) Markets are self-regulating and efficient, and any governmental interference with markets is a mistake. The 2008 crisis should have cured everyone of this fallacy, but anyone with a sense of history would realize that capitalism has been plagued with booms and busts since its origin. The only period in our history in which financial markets did not suffer from excesses was the period after the Great Depression, in which we put in place strong regulations that worked.   It’s worth noting that we grew much faster, and more stably, in the decades after World War II than in the period after 1980, when we started stripping away the regulations. And in the former period we grew together, in contrast to the latter, when we grew apart.   As I have explained in detail elsewhere, the cost of these myths goes far beyond the damage to our economy, now and in the future. The fabric of our society and democracy is suffering. The worry is that those at the top are investing their money not in real investments, in real innovations, but in political investments. Their big contributions to the presidential and Congressional campaigns are, too often, not charitable contributions. They expect, and have received, high returns from these political investments.   These political investments, exemplified by those the financial institutions made, yielded far higher returns than anything else they did. The investments bought deregulation and a huge bailout — though they also brought the economy to the brink of ruin and are a source of much of our inequality.   Such political investments undermine and corrupt our democracy. But there are other manifestations: America is fast becoming a country marked not by justice for all, but by justice for those who can afford it. (Just one of many examples is that no banker has been prosecuted, let alone convicted, for banks’ systematic lying to the court regarding the fraudulent practices that played so large a role in the 2008 crisis.) And with the increasing influence of money, especially notable in this election, the outcomes of our political process are becoming more like one dollar, one vote than one person, one vote. It’s even worse, because political inequality leads to economic inequality, which leads in turn to more political inequality, in a vicious spiral undermining our economy and our democracy.   Recognizing all this is not class warfare. It is simply acknowledging the realities of life in the United States, which the Reublicans, represented by Mr Romney and Mr Ryan have not done. That should be cause for concern: if you don’t recognize that there is a problem, and if you don’t understand the sources and consequences, you will never work to solve it.   Romney and Ryan tried a hard tack to the center in their rhetoric in recent weeks. But let no one be deceived: their tax policies will lead to even more inequality, the continued hollowing out of the middle, and even more poverty at the bottom.   * Joseph E. Stiglitz , a winner of the Nobel Prize in Economics and a former chief economist of the World Bank, is University Professor at Columbia University. His most recent book is “The Price of Inequality.” Visit the related web page
	Outrage as Pakistan child rights activist shot by taliban by International Crisis Group & news agencies   10 Oct 2012   Malala Yousafzai, a 14-year-old Pakistani child rights activist has been shot by the Taliban and is a critical condition.   The Pakistan Taliban shot the teenage children"s rights activist in the head on her school bus to purportedly avenge her campaign for pursuing girls’ right to an education in the militants former stronghold of Swat.   Many in Pakistan reacted with shock and revulsion to the shooting of the 14-year-old young girl, who was flown to intensive care in the northwestern city of Peshawar where doctors are struggling to save her life.   Police said two other girls were also wounded in the attack on Malala"s school bus, which the Taliban claimed, saying anyone who spoke out against them would suffer a similar fate.   A team of senior doctors completed her medical examination and stated her condition as critical.   "We have thoroughly examined her, she is in critical condition. The bullet travelled from her head and then lodged in the back shoulder, near the neck," a doctor told AFP. "The next three to four days are important for her life. She is in the intensive care unit and semi-conscious," he said.   Malala won international recognition for campaigning for girls rights to education and advocating peaceful solutions in Swat with a blog for the BBC three years ago, when Islamist militants burned girls schools and terrorised the valley.   Her struggle resonated with tens of thousands of girls who were being denied an education by Islamist militants across northwest Pakistan, where the government has been in conflict with local Taliban since 2007.   She received the first-ever national peace award from the Pakistani government last year, and was nominated for the International Children"s Peace Prize by advocacy group KidsRights Foundation in 2011.   The UN Children’s Fund (UNICEF) strongly condemned the attack, voicing “extreme concern” for the well-being of the three girls. “Malala spoke courageously in favour of children’s rights, especially girls’ education, in Pakistan,” it said in a statement.   “UNICEF calls on all parties to respect all children’s rights, including education in a safe and protective environment. With 20 million children already out of school in Pakistan, it is critical that quality education reaches all children, particularly the most vulnerable and disadvantaged.”   Yesterday Mr. Ban’s Special Representative for Children and Armed Conflict, Leila Zerrougui, condemned the attack “in the harshest terms.”   Tuesday"s shooting in broad daylight in Mingora, the main town of the once much-loved valley, raises questions about security more than three years after the army claimed victory against a Taliban insurgency.   Taliban spokesman Ehsanullah Ehsan told AFP the Islamist group carried out the attack after repeatedly warning Malala to stop speaking out against them. The Taliban controlled much of Swat from 2007-2009 but were supposedly driven out by an army offensive in July 2009.   President Asif Ali Zardari strongly condemned the attack, saying it would not shake Pakistan"s resolve to fight Islamist militants or the government"s determination to support women"s education.   London-based rights group Amnesty International condemned the "shocking act of violence" against a girl bravely fighting for an education.   "This attack highlights the extremely dangerous climate human rights activists face in northwestern Pakistan, where particularly female activists live under constant threats from the Taliban and other militant groups," it said.   Malala was 11 when she wrote the blog on the BBC Urdu website, which at the time was anonymous. She also featured in two New York Times documentaries.   Murtaza Salangi, the director of Pakistan Radio, said people were "outraged and standing up to be counted as if this was their own daughter ... I think it is a watershed moment because the outpouring of sympathy and support for this young girl is just unprecedented. She could be a rallying poster for people who think that extremism and terrorism is the biggest challenge, even an existential challenge, for this country."   He said the mood of revulsion extended beyond just the "educated elite", saying the switchboard at Radio Pakistan"s Peshawar studio had "lit up like Christmas lights" when phone lines were opened for people across the country to contact a phone-in programme.   Rana Jawad, Islamabad bureau chief of Geo, the country"s biggest news channel, compared footage played throughout the day of the unconscious Malala being loaded onto a helicopter to a 2009 clip showing a woman in Swat being beaten by the Taliban, which was constantly replayed and horrified the country.   "The reason the military was successful in its campaign against the Taliban in 2009 is that the whole nation was supporting them after they watched a young girl being beaten by a handful of militants," he said. "Today we have seen the reaction of the people is one of outrage, revulsion and a sense of shame at what has happened to Pakistan."   Although he noted none of the country"s religious conservative parties have yet condemned the attack, he said the Malala incident could "help the nation gel together in dismissing this mind set which attacked an innocent, harmless girl".   The country"s supreme court on Tuesday also ordered an investigation into the alleged barter of seven girls to settle a blood feud in a remote district.   * For the latest humanitarian news on Pakistan, see Reliefweb: http://reliefweb.int/headlines?search=pakistan   Oct 2012   No End to Humanitarian Crises. (International Crisis Group)   Three successive years of devastating floods threatening the lives of millions, coupled with the displacement of hundreds of thousands due to military operations and militancy, gives Pakistan’s radical Islamist groups opportunities to recruit and increases the potential for conflict.   “Since the democratic transition began in 2008, some progress has been made”, says Samina Ahmed, Crisis Group’s South Asia Project Director. “But much more is needed to build the federal and provincial governments’ disaster and early recovery response”.   Pakistan: No End to Humanitarian Crises, Crisis Group’s latest report, warns that the recurrent natural and conflict-driven humanitarian crises, which have put the lives and livelihoods of so many at risk and aggravated economic hardships, need urgent and coordinated action.   “The military’s suspicions of and animosity toward foreign actors undermine efforts to improve the humanitarian community’s coordination with government agencies”, says Ahmed. “By hindering international humanitarian actors’ access to populations in need, the civil-military bureaucracies are undermining efforts to help citizens cope in the aftermath of humanitarian disasters”.   In conflict areas where the military still holds sway, short-term security objectives often determine eligibility for state assistance. Additional restrictions have been placed on the activities and access of international and local NGOs and other humanitarian actors, particularly since the May 2011 U.S. raid that killed Osama bin Laden near a major military academy in Abbottabad.   To confront the challenges effectively, it is essential to strengthen the civilian government’s capacity to plan for and cope with humanitarian crises and to prioritise social sector and public infrastructure development. It is equally important that all assistance and support be non-discriminatory and accompanied by credible mechanisms for citizens to hold public officials accountable.   Given the magnitude of needs, timely appeals by Islamabad for funds are crucial for attracting donor attention and raising funds. However, humanitarian needs will go unmet in the absence of a coordinated approach by all humanitarian aid actors involved. International assistance must not be held hostage to the ups and downs of Pakistan’s foreign relations or to the international community’s wider geopolitical imperatives.   However, says Ahmed, “tackling the causes and consequences of conflict-related displacement and natural disasters goes beyond humanitarian action and ultimately requires state policies that promote political representation and legal protection, as well as equitable social and economic development”.   http://www.crisisgroup.org/en/regions/asia/south-asia/pakistan/237-pakistan-no-end-to-humanitarian-crisis.aspx Visit the related web page
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