Always interesting what the BBC employees find of interest….not necessarily in the course of their work but in a personal capacity…which is perhaps all the more telling…as on Twitter which they usually claim the views expressed are their own and not the BBC’s…and in the case of Huw Edwards he disclaims the retweets…which is just as well really:
Here he retweets the BBC’s favourite economist who tells us:
Inequality Is a Choice
By JOSEPH E. STIGLITZ
Joseph Stiglitz @stiglitzian 14 Oct “Inequality Is a Choice” by Joseph Stiglitz http://nyti.ms/GWGrnq
Here’s a taste of Stiglitz’s thinking and expertise:
Europe seems all too eager to follow America’s bad example. The embrace of austerity, from Britain to Germany, is leading to high unemployment, falling wages and increasing inequality.
Really?
We know the BBC doesn’t like to admit the British employment figures are on the up….but what about Germany….is unemployment rising because of austerity?
In August, Germany’s adjusted unemployment rate fell to 5.2 percent, its lowest level in more than two decades. A total of 2.17 million people were unemployed, a decrease of 108,000 or 4.8 percent on a year earlier.
I’m no economist…but er…..obviously there’s something I don’t understand about that graph.
However the heroic up and coming countries are booming and making tremendous efforts to reduce inequality…aren’t they?
On the one hand, widening income and wealth inequality in America is part of a trend seen across the Western world.
Chile, Mexico, Greece, Turkey and Hungary managed to reduce (in some cases very high) income inequality significantly, suggesting that inequality is a product of political and not merely macroeconomic forces. It is not true that inequality is an inevitable byproduct of globalization, the free movement of labor, capital, goods and services, and technological change that favors better-skilled and better-educated employees.
Of course you could argue there is nothing new about inequality…..perhaps it has lessened….as more people become super rich rather than the super rich becoming poorer.
But how about those countries he claims have reduced inequality…Greece? Well..it’s a basket case and can’t by any measure be included in the statistics.
What about Mexico?: (The country where Carlos Slim is the world’s 2nd richest person…after being the richest for 3 years)
Julio Don Juan makes $400 a month at a noisy, cramped Mexico City call center. Without a raise in three years, he says he had to pull his 7-year-old son out of a special-needs school he can no longer afford.
In some places he might seek another job. Not in Mexico, where wages after inflation have risen at an annual pace of 0.4 percent since 2005 — worse than other nations in the region including Brazil, Colombia and Uruguay, according to the International Labour Organization. Close to a third of Mexicans toil in the informal economy without steady income. Julio Don Juan says many would envy him.
The cheap labor that is helping Mexico surpass China as a low-cost supplier of manufacturing goods to the U.S. — and lured companies including Nissan Motor Co. (7201) — has restrained progress for many of the country’s 112 million citizens.
How about Chile…oh, there’s Mexico again:
A recent report by the Organization for Economic Cooperation and Development (OECD) showed income inequality in Mexico and Chile were among the widest of the 33 nations surveyed.
Oh..and what about Turkey..and Chile, and Mexico again?
Global Income Inequality: GlobalPost Puts America’s Gap Between Rich And Poor In Perspective
Among developed nations, only Chile, Mexico, and Turkey have higher income inequality than the U.S.
On the Gini Index, zero equals perfect equality and one represents absolute inequality in which one person owns everything.
Well…he got Hungary right, I’ll give him that one.
Good of course to see a BBC employee taking an interest in what is essentially the Labour Party narrative….the apparent ‘cost of living crisis‘ and inequality….but also perhaps learning their lines from one who has quite clearly mastered economics to such a high level that he doesn’t feel the need to base his thoughts on what is actually happening on the ground.
Is inequality the result of political decisions rather than Globalization as Stiglitz claims? Just what are the major causes of a ‘cost of living crisis’?.…food prices and fuel…neither of which the government control to a great extent…and of course ‘Quantitative Easing‘ which raises inflation by devaluing the currency….introduced by Labour’s Gordon Brown…..it may have been necessary but the effects on spending power are being ignored, conveniently. Globalization moved jobs to countries like China and India with very low labour costs…..reducing employment and incomes in developed countries.
In one respect Stiglitz is right…Labour’s immigration policy destroyed job opportunites and incomes in the UK….thus producing a generation without jobs or hope and even those in work found they were competing with low wage immigrants for their jobs…no wonder wages don’t rise.
So that is one political decision that increased inequality….but you won’t hear it from the BBC.
Stiglitz is wrong about austerity and unemployment, he is wrong about inequality and the countries which he claims are cleaning up their act….let’s hope no one at the BBC are formulating their news bulletins and current affairs programmes based on Stiglitz’s witterings.
