The Price of Inequality: How Today's Divided Society Endangers Our Future (69 page)

   historical, 29–30, 332

   income, 2, 3, 4, 7–8, 9, 22, 24, 25, 26, 27, 29, 30, 52, 53, 54, 55, 56, 57, 71, 72, 77, 79–80, 81, 85, 86, 127, 153, 178, 183, 202, 233, 240, 241, 267, 294–95, 296, 297, 298, 299, 300, 311, 328, 332, 335;
see also
income redistribution

   and instability, 5, 84–92, 117, 240

   justifications for, 27, 29, 30, 77–78, 81, 154, 156, 342

   lifetime, 26, 106, 310, 311

   macroeconomic factors in, 238–64

   markets’ effect on, 52–82

   perceptions of, 127, 147–48, 152–55, 159, 160, 179, 184

   remedies for, 29, 107, 114–17, 213, 237, 268–85, 287

   rent seeking and, 32, 38, 40, 77, 107, 173, 213

   and social distance, 148, 160

   societal effects of, xii, xvi–xvii, xx, xxii, 2, 18, 20, 27, 65, 76, 84, 90, 100, 104–6, 117, 326–27

   societal factors in, 53, 64–71, 82, 84, 282

inflation, 219, 239, 240, 241, 242, 248–49, 255, 259–60, 261, 262, 263, 279, 365, 378, 383, 384, 385, 391, 392, 393

Informant, The,
320

infrastructure, 88, 92, 93, 102, 115, 117, 155, 216, 267, 283

innovation:

   in business, 35, 41, 46, 78, 96, 178–79, 314, 315

   direction of, 58, 244, 270, 283–84

   patent law and, 43, 202

   scientific, 41, 78, 93, 100, 202

insurance industry, 176, 177, 228, 274, 276

intellectual property, 140, 202–3, 316, 323, 354, 375

   
see also
patents

interest rates, 3, 7, 49, 71, 80, 86, 88, 110, 177, 208, 209, 217, 234, 242, 243, 244, 245, 251, 259, 260, 261, 262, 283, 380, 382, 385, 386, 392

International Monetary Fund (IMF), 60, 61, 91–92, 138, 141, 181–82, 231, 316, 353

Internet, 41, 45, 87, 115, 174, 349, 358

interns, internships, 76, 332

intrinsic rewards, 111–12

investment:

   globalization and, 60, 73, 74

   private, 6, 73, 74, 86, 87, 88, 92, 222, 225, 226, 230, 235, 243, 244, 283, 335, 382

   public, 23, 40, 80, 84, 88, 92–94, 102, 114, 115, 155, 174, 216, 217, 218, 230, 232–33, 263, 267, 273, 279, 281, 282–83, 381

Iran, 22, 23

Iraq War, 101, 143, 176, 209, 210, 211, 340

Ireland, financial crisis in, 182, 210, 219, 220, 255, 256

irrigation, 122, 322

Israel, 14, 262

Italy, 18

   financial crisis in, 138–39, 255, 389–90

Japan, 14, 19, 308

Jobs, Steve, 41, 315

JPMorgan Chase, 345, 374, 388

judges, 44, 200, 373

Justice Department, U.S., 199, 318

Kerry, John, 359

Kessler, David, 357

Keynes, John Maynard, 86, 105, 151, 267

King, Mervyn, 248

Korea, 16, 19

Krueger and Mas, 104

Krugman, Paul, 137

labor, 55, 152

   bargaining power of, 61, 64, 277, 281;
see also
labor unions

   demand for, 38, 53–57, 61, 63

   in developing world, 63, 64, 326, 397

   discrimination in, 68–70, 71

   fairness in, 103–4, 127

   free mobility of, 59–60, 61–62

   globalization’s effect on, 56, 59–60, 61, 63, 64, 80, 233, 277, 280, 281, 324, 325

   Great Recession’s effect on, 29, 57, 65, 67, 91, 124–25, 231, 241–42, 250, 380

   macroeconomic policies affecting, 80, 225, 279

   motivation of, 102, 103

   polarization of, 8–9, 56, 79, 80, 133, 277

   public-sector, 57, 322

   in recessions, 29, 67, 124

   and social capital, 124–25

   structural changes in, 53–54, 56, 232–33, 263, 280–81, 285

   technology’s effect on, 53, 54–56, 63, 79, 80, 277, 280, 283, 334

   women in, 14

   work hours and, 9, 14, 26, 327

   
see also
employment; unemployment; wages

labor unions, 38, 57, 64–65, 66, 67, 79, 80, 281–82, 327

Latin America, 23, 40, 84, 231

Latvia, austerity in, 231

Lauder, Ronald, 72

lawyers, 42–43, 99–101, 190, 203, 339

Lay, Ken, 178

legal system, U.S., 187–206

   alternative frameworks for, 188, 202

   banks’ deception in, 198, 199, 200, 201, 373

   burden of proof in, 199–200

   contracts in, 197

   corporate advantages in, 66, 132, 189–90, 191, 203, 272, 327, 374

   costs in, 100, 189–90, 202

   distributive consequences of, 190, 193, 271, 317, 370

   economic bias in, 44

   Federal Reserve accountability in, 252

   financial crisis prosecution in, xv–xvi, 70, 119, 199, 372, 373

   financial sector’s favoring in, 191–202, 203, 204–6

   information asymmetries in, 271, 368

   political influence in, 44, 190–91, 200

   property rights in, 190, 194, 197, 198, 199

   purpose of, 100, 188–91

   reform of, 273

   rent seeking in, 42, 43, 203, 273

   and social responsibility, 121

   unfairness in, 42, 43, 100, 189–90, 191–202, 203, 206, 368, 373, 375

Lehman Brothers, 253, 313, 390

Leme, Paulo, 353

Lenin, Vladimir, 354

Lessig, Lawrence, xxiv

LG, 203

Lincoln, Abraham, 137

List, John, 347

lobbying, 48, 95, 101, 185, 196, 319, 324, 325, 338

Lockheed Martin, 210

London Interbank Offered Rate (Libor), 47

Longitude
(Sobel), 109

Lula da Silva, Luiz Inácio, 5, 139, 353

Luxembourg, 183, 286

manufacturing:

   compensation shifts in, 65, 328

   job losses in, 54, 56, 57, 232–33, 285, 321

   societal impact of, 156

marginal productivity theory, 30, 33, 77, 267

marketing, 150–51, 160, 162, 357, 359

Marlboro Man, 151, 354

marriage, economic insecurity and, 15, 303

Marshall, Alfred, 102

Marx, Karl, 30, 292

Massachusetts, 200–201

McCarty, Nolan, xxiv

McDonald’s, 381

media, 128–29, 134, 135, 136, 160, 163, 252, 272, 286, 335, 348, 349, 358

Medicaid, 14, 228, 277, 378

Medicare, 17, 48, 97, 147, 163, 176, 210, 228–29, 265, 320, 355, 364, 378, 380

Mexico, 16, 42, 64, 138, 176, 365

MF Global Holdings, 313

microcredit, 196–97

Microsoft, 42, 44, 45–46, 74, 203, 317, 318, 319

middle class, 54, 117, 137

   assistance to, 29, 274

   economic insecurity of, xvii, 12–14, 23, 26, 103, 265–66

   globalization’s effect on, 63, 64

   Great Recession’s effect on, 10

   hollowing out of, 2, 9, 25, 38, 84, 133, 300

   income of, 3, 4, 7, 8, 9, 14, 25, 54, 56, 57, 63, 72, 240, 297, 298, 300, 385

   recovery of, 29, 225

   tax deductions for, 222–24, 379

   unfair policies toward, xv, xxii

   wealth sources of, 3, 8, 13–14, 91, 167

Middle East, 40

   
see also
Arab Spring

Mill, John Stuart, 368

monetarism, 257, 258–59

monetary policy, 85, 86, 88, 133, 177, 208, 234, 239–40, 248, 250, 251, 252, 254, 257–58, 259, 261, 262, 263–64, 380, 382, 385, 389, 392

   distributive consequences of, 243–45, 264, 279

   idea-shaping in, 256–63

monopolies 31, 32, 35, 39–47, 95, 97, 140, 213, 270–71, 274, 316, 318

moral hazard, 171, 229, 256, 362, 363

Mortgage Electronic Registry System (MERS), 198, 201, 374

mortgage fraud, 198, 201, 372, 373

mortgage restructuring, 169–72, 201–2, 284–85, 362, 363

mortgages, tax deductions for, 222, 223, 379

mortgage securities, 205

Mosaic, 318

motivation, 102, 103, 111–12

Motorola, 203

Mozilo, Angelo, 333

Mueller, Edward, 42

Mullainathan, Sendhil, 103

municipal bonds, 212, 378

National Academy of Sciences, 26

National Center for Supercomputing Applications, 318

National Commission on the Causes of the Financial and Economic Crisis in the United States, 357, 358

National Economic Council, 180

Netherlands, 19, 22

Netscape, 45–46, 318

New Deal, xiii, 88, 231

Newfoundland, 138

New York Times,
11, 119, 205

Nokia, 203

North American Free Trade Agreement, 141

Norway, 22, 23, 183, 220

NTP, Inc., 203

Obama, Barack, x, 352

   deficit reduction by, 207

   and ethanol subsidy, 51

   Federal Reserve nominees of, 319

   financial crisis response of, xv, 168, 169, 361

   health care program of, 14, 163, 276

   tax position of, 395

Obama administration, xiv, 67, 170, 171, 200, 250, 284, 362, 396

Occupy Wall Street, ix–xiv, xix–xxi, 102, 116, 118, 127, 134, 345

“Of the 1%, for the 1%, by the 1%” (Stiglitz), xi

Olin Foundation, 44, 359

1 percent:

   definition of, xxii

   economic framework’s favoring of, xx, xxii, 31, 34, 62, 67, 91, 117, 131, 142, 173, 174, 189, 191, 204, 239, 244, 245–46, 264, 348, 354

   economic security of, 18, 19, 25

   globalization’s benefits to, 62, 64, 142

   idea-shaping by, 129, 134, 137, 146–86, 211, 236, 256, 287

   income of, 2, 4, 8, 25, 52, 72, 85, 215, 267, 294, 295, 297, 298, 299, 300, 315, 332, 335

   legal framework’s favoring of, 188, 191, 202, 206, 273

   media’s control by, 129, 134, 286

   political power of, xix, 32, 67, 83, 86, 89, 101, 118, 119, 120–21, 129, 131–33, 134, 137, 138, 146, 191, 267, 285, 348, 351

   public perception of, 20–21, 146, 154, 159, 358

   reform aimed at, 29, 268–74

   rent seeking by, 32, 38, 41–43, 77

   saving by, 85, 88, 223, 275

   small government preference of, 93

   social contract violation by, xvi–xvii

   social contributions of, 27, 41, 77–78, 96, 266

   social norms’ shaping by, 53

   taxation of, 5, 38, 42–43, 62, 71–73, 74, 76, 77, 84, 86, 87–88, 114, 115, 116, 138, 142, 159, 167, 208, 209, 211, 212, 214–15, 218, 221, 223, 224, 225, 226, 256, 274, 275, 294, 312, 335, 344, 360, 383, 394

   value change in, 288

   wealth of, 2, 3, 8, 25, 32, 38, 56, 72, 73, 80, 84, 166–67, 295

   
see also
corporations; financial sector

Organization for Economic Cooperation and Development (OECD), 16, 185

Orshansky, Mollie, 305

Ostrom, Elinor, 322

overdrafts, 194, 370

Pager, Devah, 69

Papua New Guinea, 184

patents, 43, 202, 203, 316, 374, 375

   
see also
intellectual property

pension funds, 227–28

Personal Responsibility and Work Opportunity Reconciliation Act, 17

Pew Foundation, 20

pharmaceutical industry:

   government munificence toward, 40, 48, 97, 210, 211, 224, 228, 272, 276

   research in, 97

   
see also
health industry

Pierson, Paul, xxiv

Piketty, Thomas, xxiii, 114

Pinochet, Augusto, 258

polarization, 8–9

Polarized America
(McCarty, Poole, and Rosenthal), xxiv

police lineups, 149

police states, 125

politics, U.S.:

   cognitive capture in, 161–62

   corporate influence in, 34, 37, 41, 47, 48, 50, 51, 61, 62, 95, 99, 101, 111, 131–32, 135, 136–37, 200, 202, 285, 286, 319, 324, 325, 338, 350

   distributive consequences of, 31, 52, 58, 239, 277, 278, 322

   economy’s linkage with, xi, xix–xx, xxiv, 34, 38–39, 47, 52–53, 59, 65, 66, 89, 118, 131, 135, 138, 151, 173, 266, 287, 288–89, 348

   idea-shaping in, 129, 137, 148, 149, 151–52, 153–55, 159–62, 163, 166–72, 175, 180, 185, 186, 285

   legal consequences of, 190–91

   media’s role in, 129, 134, 135, 136, 160, 163, 286

   reform of, 135–36, 267, 285–86

   regulatory capture in, 47–48, 248, 249–50, 253, 264

   societal factors in, 64

   unfairness in, x, xi, xii, xviii–xx, 31–32, 39, 41, 83, 101, 114–15, 118, 119, 120–21, 127, 129, 131–33, 134, 135, 136–37, 138, 144, 146, 191, 196, 200, 202, 267, 285, 286, 319, 324, 325, 338, 348, 350, 351

   voting in, 119–21, 129–31, 133, 134, 135, 137, 286, 288, 325, 345, 349, 350, 351, 355

   
see also
democracy, U.S.; government, U.S.

pollution, 213, 215, 224

   
see also
environment

Poole, Keith T., xxiv

poor:

   assistance to, xii, 29, 225, 274

   banks’ exploitation of, xvii, 37, 40, 58, 70, 94, 154, 196–97, 201, 271, 369

   cognitive resources of, 103

   crime and, 15

   economic insecurity of, xvii, 12–14, 23, 26, 103

   economic mobility of, 4, 18–19, 94, 117

   education of, 19, 20, 31, 75, 94, 102

   environmental conditions of, 184, 308

   food needs of, 16, 102, 305–6

   globalization’s effect on, 63, 64

   health care of, 14, 31, 70, 74, 276, 353

   homeownership by, 76, 108, 152, 157, 161, 171, 223

   income of, 4, 8, 9–10, 14, 16, 25, 63, 72, 240, 297, 298, 300, 332, 385

   inflation’s effect on, 261

   political disenfranchisement of, 127, 130–31, 133, 134, 135

   public spending’s effect on, 2, 10, 14, 15, 16–17, 26, 31, 63, 74, 277

   saving by, 224, 275

   segregation of, 75–76

   taxation of, 74, 88, 218

   unfair policies toward, xv, xxii

   unfavorable view of, 26, 27, 154, 160, 171, 229, 312

   wealth sources of, 3, 8, 13, 70, 82, 167, 171, 172

   
see also
United States, poverty in

Portugal, financial crisis in, 231, 255

poverty gap, 16

poverty trap, 20

predatory lending, xvii, 37, 40, 58, 70, 90, 119, 124, 191–93, 194, 197–98, 201, 239, 246, 249, 269–70, 313, 314, 333, 369

   
see also
foreclosures