Paul Krugman: Inequality and Recovery

Joe Stiglitz has an Opinionator piece arguing that inequality is a big factor in our slow recovery. Joe is an insanely great economist, so everything he says should be taken seriously. And given my political views and general concerns about inequality, I’d like to agree.

But — you knew there was a “but” coming — I’ve thought about these issues a lot, and haven’t been able to persuade myself that this particular morality tale is right.

It’s worth noting that two of Joe’s four points aren’t really about the current recovery. He argues that high inequality is causing huge waste of human talent, because the poor and increasingly the middle class lack access to good education; and I agree. He also argues that inequality fosters financial crisis, and I agree with that too.