New York mayor leads attack on the 1%

Joseph Stiglitz, the Nobel prize-winning economist who popularised the term “the one percent” to spotlight increasing income inequality, headlined the first stop of a four-day tour by New York mayor Bill de Blasio.

De Blasio, who is seeking to become a national leader for progressives, joined Elizabeth Warren, the United States senator from Massa­chusetts who blames Wall Street recklessness for the 2008 financial crisis. The two Democrats on Tuesday introduced a Stiglitz report in Washington suggesting that new regulations could curb the flow of gains to the wealthiest and most powerful.

De Blasio, 53, who has travelled to Nebraska, Iowa and Wisconsin in the past six weeks, spent two days in Washington before he headed to California on Thursday.

He says he wants to focus on income disparity as American voters begin to pay attention to the 2016 presidential race.

“We’re both going to be working with Joe Stiglitz, who is one of the greatest economic minds in this country – a Nobel prize-winning economist who has put out some of the most powerful analyses of what’s wrong and how we have to fix it if we’re going to save the middle class,” De Blasio said on Monday at a news briefing.

He also appeared near the steps of the US Capitol accompanied by elected officials, labour leaders, child advocates and celebrities, who will sign his newly drafted “progressive agenda”.

De Blasio describes the plan as a mirror image of the 1994 Republican “Contract with America.” He’s calling for taxes on the wealthy so money can be spent on education, affordable housing and job-creating infrastructure.

Stiglitz, 72, received the Nobel prize in 2001 for writing about how access to information enhances economic power. The title of his May 2011 Vanity Fair magazine article, Of the 1%, by the 1%, for the 1%, became the rallying cry for Occupy Wall Street four months later.

Stiglitz presented Rewriting the Rules for the American Economy: An Agenda for Shared Prosperity, at the National Press Club. The study was prepared for the Roosevelt Institute, a New York-based policy research group affiliated with the Franklin and Eleanor Roosevelt Presidential Library.

“The financial crisis of 2008 and the Great Recession that followed exposed the inadequacy of the old economic models,” Stiglitz writes. “Equality and economic performance are in fact complementary rather than opposing forces.”

Changing laws and government regulation to rein in the powerful and expand prosperity to more of the American public could reverse a 30-year trend in which an increasing percentage of the nation’s wealth has wound up in the hands of fewer people, Stiglitz argues. The trend has coincided with the increasing power of large campaign donors who influence legislation, he says.

For De Blasio, sharing the stage with Warren and Stiglitz is another step towards his goal of becoming a national spokesperson for what he describes as a growing movement focused on economic fairness. He says inequality is a winning issue for Democrats.

De Blasio cites minimum-wage increases that voters approved in 2014 in Alaska, Arkansas, Nebraska and South Dakota, so-called red states because of their tendency to vote Republican, as evidence that a platform calling for increased wages and benefits for the poor holds potential.

Chris Lehane, a Democratic consultant in San Francisco, said De Blasio’s efforts could put pressure on Republicans who acknowledge income inequality to offer solutions.

“It’s great for a Republican candidate to talk about where their family came from and how much they appreciate the people who do the work in the kitchen,” Lehane said.

De Blasio’s advocacy could help “smoke the Republicans out”, forcing them to articulate specific stands, he said. – © Bloomberg