Economics

Quand l'inégalité tue

Dec 7, 2015 Joseph E. Stiglitz

NEW YORK – C'est cette semaine que Angus Deaton va recevoir un prix Nobel d'économie bien mérité pour "son analyse sur la consommation, la pauvreté et la protection sociale". Peu après l'annonce de cette distinction, il publiait avec Ann Case dans les Proceedings of the National Academy of Sciences une recherche dont les conclusions sont des plus surprenantes – et qui mérite au moins autant de publicité que la cérémonie de remise des prix Nobel.

Analysant une énorme quantité de données se rapportant à la santé et aux causes de décès des Américains, Case et Deaton ont montré que l'espérance de vie et la santé des Blancs américains d'âge moyen déclinent, notamment pour ceux qui n'ont pas fait d'études supérieurs. Suicide, drogue et alcoolisme en sont les principales causes.

L'Amérique se félicite d'être l'un des pays les plus riches de la planète et elle peut se vanter d'avoir vu chaque année (à l'exception de 2009) son PIB par habitant augmenter. Or la santé et la longévité sont supposées être des signes de prospérité. Mais alors que les dépenses de santé par habitant y sont plus élevées que presque partout ailleurs dans le monde (et encore plus élevées en terme de part du PIB), elle est loin d'être en tête en ce qui concerne l'espérance de vie. Ainsi la France dépense moins de 12% de son PIB pour la santé – contre 17% aux USA – mais l'espérance de vie des Américains est inférieure de 3 ans à celle des Français.

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Joseph E. Stiglitz

Writing for PS since 2001
331 Commentaries

Joseph E. Stiglitz, a Nobel laureate in economics and University Professor at Columbia University, is a former chief economist of the World Bank (1997-2000), chair of the US President’s Council of Economic Advisers, and co-chair of the High-Level Commission on Carbon Prices. He is Co-Chair of the Independent Commission for the Reform of International Corporate Taxation and was lead author of the 1995 IPCC Climate Assessment.

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0 Comments on this paragraph, 64 Comments on this article

Chris Cowsley Mar 14, 2016

It is a simple and undeniable consequence of arithmetic. As inequality increases relative deprivation has to move higher and higher up the food chain. Trickle down does not work, trickle up demonstrably does.
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wolfgang price Dec 18, 2015

With due deference to Drs. Deaton and Steiglitz I find the article and some comments from the 'research' work wanting. That there various social correlations to income would seem self-evident in a market economy in which services depend on income. Correlation does not establish causality.

American (as increasingly Europeans) ignore nutrition as a health factor. Even those who pride themselves with being vegetarian simply take this to mean their nutrition requirements are met. The economy supports a bloated population. While income effects choices for the range of food desired and it does not determine the access to the 'basic' food requirements for healthy living. Family assistance programs while meager if used to meet the 'basic' nutrition requirements might well have different health and death outcomes.

Nor is education any longer relevant to jobs, mobility, or suicides. The 'job economy' is phasing out. The politics of 'job creation' and the academics that still promote 'growth' as the means for full-employment are contributing to the labor force disenchantment and gloom by their promises of return to former good times with ample employment and high wages.

Disillusion may well contribute to the status of health BUT it is not from lack of access to health care but due to the lack of social and economic policies that fully fail us for the 21st century development of human resources.
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Pingfan Hong Dec 15, 2015

We need to place the discussion of inequality in the context of social justice.
Gini coefficient and Palma index, no matter how sophisticatedly constructed, can provide neither sufficient nor necessary basis of social justice for the discussion of inequality issues. These indictors can hardly be used as the just guidance for policy making.

For example, when Gini coefficient of a country increased from 0.3 to 0.4 in the past three decades, we cannot claim this country has necessarily become less just, or more unjust.
Similarly, among countries, if a country has higher Gini coefficient than another, we cannot sufficiently claim the former is a more unjust society than the latter.
We would need to revisit some theories of social justice.
For example, John Rawls, an American political philosopher， believes justice is the first virtue of social institutions. In his view, any laws and institutions, no matter how efficient and well-arranged, must be reformed or abolished if they are unjust.
See my blog on "remarks on inequality" at http://blog.sina.com.cn/s/blog_9cc0e6840102wpun.html
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Ben Leet Dec 14, 2015

The U.N. Human Development Index adjusted for inequality, there is such an index, ranks the U.S. at 28th place, a drop from 5th when inequality is not considered. Yet our per capita after-tax income is over $40,000. On average each household earns $99,258 per year according to the CBO report on income distribution in year 2011. We need to try to create more and better paying work. Roosevelt decreased unemployment from 25% to below 10% in 4 years, 1933 - 1937 and was re-elected massively. His secret: public employment. We spend about 4.5% of GDP on low income programs (Medicaid, EITC, food stamps, etc). We reduce poverty from 29% to 15.3% according to the SPM U.S. Census poverty report. We could easily capture about 4% more of GDP. The wealthiest 1% increased their share of the national income from 8% to 16% between 1979 and 2007. Their income share is too high and could be used to improve the living standards of all, boosting GDP is the misplaced goal.
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Hugo Penteado Dec 14, 2015

The solution for reducing inequality Stiglitz proposes is more economic growth. This is the only policy for him (and for many) to reduce social inequality. What surprises me is that I have heard this in many sustainability forums. That is, when they raise this issue - inequality never seen before as now – this only serves to justify more GDP growth, which is an economic suicide. It matters little whether this causal relationship is false: more growth not necessarily produced less inequality.
Stiglitz it is among those who believe that the Earth is a subsystem of the economy. It is not close to the scientific findings from people that now are terrified by the current rapid process of extinction of life, unwavering, despite the speed of loss of species be tens of thousands of times faster than in normal geological ages and everyone acts as if it was not a problem to me, but in biological terms we are all one. In other words, we create a totally abnormal and threatening situation and act like everything was on track. Let´s talk about Paris. After they promise in the meetings, most scientists are saying that we keep sinking in the swamp. Don´t be worried. Stiglitz has the solution. Growth. Growth. Growth in a finite place like Earth challenging basic Physical laws and to prove our ignorance as economists. The tecnofix everyone proclaims before or without a urgent ecnomic paradigm shift gives the same end result for humankind: mass suicide.

Congratulations!

Hugo Penteado
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Joe Bongiovanni Dec 14, 2015

The Nobelist on the Nobelist on even more statistics on the 'results' of inequality.
BFD.
What's the CAUSE, Dr. Joe ?
Is it the debt-based money system?
Cause, if so .....
sovereignmoney.eu
Let's talk about causes and solutions.
Please, no more data.
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Vasudevan M K Dec 14, 2015

It was once said of Post nuclear war world "The living will envy the dead" So if in unequal America if you die early, others might actually envy you!! So relax and do not get worked up by articles like this. Come to India and Live here comfortably with your social security and educate your children and much lower cost and send hem back to America. May Indians do it, you can also do it. There are always alternatives if you can accept them. Lastly, who ever said living long and suffering is better than death?
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Enrique Woll Battistini Dec 14, 2015

This discussion on the declining fortune of America's middle class, and the widening gap between the well being of blacks and whites, brings to mind the Social Progress Index (SPI), its relevance and its relationship with GDP. If happiness, which I understand as the ultímate goal of social progress, were equivalent to personal well being, and personal well being were equivalent to personal wealth, and personal wealth were equivalent to social status, the Social Progress Index (SPI) would be highly relevant to the pursuit of social progress, provided it would measure changes in social status over time, which it does not. Were it thus, social progress would be achievable in terms of the SPI provided the goals for improvement were reasonable over time. All this, to the extent that the SPI were indeed a national average of the self-assessed index of satisfaction with personal well being by the man on the street, by people at large, a happiness index as it were, as the SPI indicators would seem to reflect states of personal wealth, but only at specific points in time. GDP on the other hand is a national economic production index, not of wealth, and as such cannot be easily compared to the SPI, but rather with the change in SPI year to year, as SPI would greatly depend on, well, national wealth. There is a link between the GDP and the SPI to the extent that GDP reﬂects the value of consumption, grossly deﬁned, as not all that is produced is consumed and not all that is consumed is produced locally. Moreover, this link or relationship depends on the level of utility derived from the consumption of goods and services that are locally produced and imported, and on the level of utility derived from local investment both domestic and FDI, where uitlity is deﬁned as equivalent to satisfaction. The more utility derived from consumption and local investment, the greater the satisfaction and the greater the SPI, regardless of GDP. To the extent that satisfaction with personal well being regarding any speciﬁc issue is qualitative, at a personal level, it is subjective, and the SPI more loosely linked to the speciﬁc GDP, which is quantitative, with the nature of consumption and local investment being far more relevant to SPI than the speciﬁc GDP attained. Thus the SPI goal is more achievable than the GDP goal, though the greater the GDP, all else being equal, the greater the SPI will be. But, the notion that the fraction of humanity living in Poverty will be only 12% by year end 2015 is preposterous, and even if it were true, it would not suﬃce. Why? Because that indicator is likely based on the Leaders-of-The-World's (World Bank and the International Monetary Fund) statement in Lima, Peru, that the benchmark for escaping Poverty is USD 4 per person per day! Would you NOT consider yourself poor if your daily consumption level were four (4) dollars per day? I am relatively poor, and I spend USD 16 on a round trip taxi ride across town in Lima to lunch with an old aunt. If the Poverty indicator used in the Global Goal for 2030 were the SPI, a new concept of Poverty would be introduced, diﬀerent from wealth-based or consumption and investment-based indexes, but aligned with average national self-assessed satisfaction with personal well being. Useful? Yes, very. But it leaves out Direct consideration of the all-important concept of Relative Poverty, relative to the status of others that is, whether of domestic groups or foregn groups, as no comparison of Relative satisfaction stemming from consumption or local investment, let alone of wealth, is made. The importance of the concept of Relative Poverty can easily be grasped if one considers that it has been, and will likely always be, the Main Common Factor in the Origin of Wars. This consideration leads to the inescapable truth of the need the wealthy have, and that wealthy countries have, to invest in Comprehensive Global Development, and the advantages of doing so: Peace and Prosperity for all. SPI, however deﬁned, and wherever determined, and the people it would apply to, will always beneﬁt from Comprehensive Global Development, which would require an articulation of Private and Public institutions having or capable of having a positive impact on such Development. In The Americas, such positive impact would be had by implementing systems in the spirit of “A Partnership for Development with the United Statesof America” (Sociedad para el Desarrollo con los Estados Unidos de América).

https://www.academia.edu/17936114/Living_in_Peru_-_Uses_and_Limitations_of_Michael_Greene_s_Social_Progress_Index_SPI_for_Development_-_2015102202
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Robert REYNOLDS Dec 14, 2015

I wonder if the French and the Russians had the benefit of the likes of Joseph Stiglitz (and others like Paul Krugman and Steve Keen) trying to warn them of the dangers of inequality and complacency and greed by the ruling classes before 1792 and 1917 respectively. They probably did, and they were probably ignored in a similar way as is the case today. The more things change, the more they stay the same.
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Martin Screeton Dec 14, 2015

Corporations... We die You Die :) ... and We have already quit feeding you... lets hope you die slowly and imperceptibly. However that seems to be apparent already.
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philip meguire Dec 13, 2015

The only "usurious" US$ interest rates are those charged on credit cards.
"In 2005, President George W. Bush’s administration made it far more difficult for households to declare bankruptcy and write off debt."
ME. Congress did this. Personal bankruptcy has remained popular.
Just how long should unemployment insurance last?
How do we deal with the fact that many Americans cannot find work paying more than, say, 30K/year?

"Those who had invested in the stock market saw much of their wealth wiped out..."
ME. Not if they held on to their mutual funds. Stock prices are 3.5x higher now than they were in early 2009.

"those who had put their money in safe government bonds saw retirement income diminish to near zero, as the Fed relentlessly drove down both short- and long-term interest rates."
ME. Wrong. Long term bond funds have had decent returns throughout this century.

"With college tuition soaring..."
BECAUSE of easy student loans!
The typical BA is no longer worth all that much; that is the real problem with the student loan scheme. The best payoff to the invested dollar is a technical degree from a community college. These degrees cost a lot less than 4 year degrees.
"...student debt seemed even worse than other forms of debt."
ME. The problem is the low paying jobs many college grads now hold.

"There was no way that this mounting financial pressure could not have placed middle-class Americans and their families under greater stress. And it is not surprising that this has been reflected in higher rates of drug abuse, alcoholism, and suicide."
ME. The findings of Deaton & Case are not about 25-44 year olds, but 45-54 year olds. The issues raised by Stiglitz do not clearly apply to the latter demographic.

Finally, the USA is NOT "the world’s quintessential middle-class society"; I reserve that honour for the Scandinavian nations, and Switzerland.
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Lance Brofman Dec 13, 2015

Depressions occur after investment bubbles burst. In free-market capitalism, capital generates income for the owners of the capital which in turn is used to create additional capital. This is very good. Sometimes, it can be actually too good. As capital continues to accumulate, its owners find it more and more difficult to deploy it efficiently. The business sector generally must interact with the household sector by selling goods and services or lending to them. When capital accumulates too rapidly, the productive capacity of the business sector can outpace the ability of the household sector to absorb the increasing production.

The capitalists, or if you prefer, job creators use their increasing wealth and income to reinvest, thus increasing the productive capacity of the business they own. They also lend their accumulated wealth to other business as well as other entities after they have exhausted opportunities within business they own. As they seek to deploy ever more capital, excess factories, housing and shopping centers are built and more and more dubious loans are made. This is overinvestment. As one banker described the events leading up to 2008 – First the banks lent all they could to those who could pay them back and then they started to lend to those could not pay them back. As cash poured into banks in ever increasing amounts, caution was thrown to the wind. For a while consumers can use credit to buy more goods and services than their incomes can sustain. Ultimately, the overinvestment results in a financial crisis that causes unemployment, reductions in factory utilization and bankruptcies all of which reduce the value of investments.

If the economy was suffering from accumulated chronic underinvestment, shifting income from the non-rich to the rich would make sense. Underinvestment would mean there was a shortage of shopping centers, hotels, housing and factories were operating at 100% of capacity but still not able to produce as many cars and other goods as people needed. It might not seem fair, but the quickest way to build up capital is to take income away from the middle class who have a high propensity to consume and give to the rich who have a propensity to save (and invest). Except for periods in the 1950s and 1960s and possibly the 1990’s when tax rates on the rich just happened to be high enough to prevent overinvestment, the economy has generally suffered from periodic overinvestment cycles.

It is not just a coincidence that tax cuts for the rich have preceded both the 1929 and 2007 depressions. The Revenue acts of 1926 and 1928 worked exactly as the Republican Congresses that pushed them through promised. The dramatic reductions in taxes on the upper income brackets and estates of the wealthy did indeed result in increases in savings and investment. However, overinvestment (by 1929 there were over 600 automobile manufacturing companies in the USA) caused the depression that made the rich, and most everyone else, ultimately much poorer.

Since 1969 there has been a tremendous shift in the tax burdens away from the rich on onto the middle class. Corporate income tax receipts, whose incidence falls entirely on the owners of corporations, were 4% of GDP then and are now less than 1%. During that same period, payroll tax rates as percent of GDP have increased dramatically. The overinvestment problem caused by the reduction in taxes on the wealthy is exacerbated by the increased tax burden on the middle class. While overinvestment creates more factories, housing and shopping centers; higher payroll taxes reduces the purchasing power of middle-class consumers. ..."
http://seekingalpha.com/article/1543642
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jim bridgeman Dec 13, 2015

Title is fashionable but wrong. The article tells us that declining social welfare kills. That may or may not be caused by inequality.
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Allan Bleiken Dec 13, 2015

WELL STATED.

if the American political leadership and the 1% do not respond to this critical issue they will be putting themselves are risk.
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Bruce Bean Dec 13, 2015

Why do you say it was the Bush admin that changed the bankruptcy law?. That law was lobbied for 6 years and many Dems supported it, or in the case of Sen Clintin (declined to vote). See below.
We know you want to work in the next Clintoin Administration, but this politicizes tour position. It does not enhance it.
YEAs ---74

Baucus (D-MT)
Bayh (D-IN))
Biden (D-DE)
Bingaman (D-NM)
Byrd (D-WV)
Carper (D-DE)
Conrad (D-ND)

Inouye (D-HI)
Johnson (D-SD)
Kohl (D-WI)
Landrieu (D-LA)
Lincoln (D-AR)

Nelson (D-FL)
Nelson (D-NE)
Pryor (D-AR)
Reid (D-NV)
Salazar (D-CO)
Stabenow (D-MI)
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Myles Thompson Dec 13, 2015

To quote Bill Moyers, "the system isn't broken, it's fixed."
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Ian Maitland Dec 13, 2015

Wow! Talk about letting your theories get ahead of the facts!

About the Case-Deaton results: Andrew Gelman's re-analysis found that "When the age-aggregation bias is removed, there is no increase in death rates among this group since 2005. The data show a decrease from 1989-1999, an increase from 1999-2005, and a flat pattern since 2005 (a mix of an increase for women and an increase for men)." So much for the effects of the Great Recession.

Another finding is the curious gender differences that other critics found. "Case and Deaton failed to see that rising mortality is especially pronounced among women...., in the decade between 1992-96 and 2002-06, female mortality rates increased in 42.8 percent of US counties. Only 3.4 percent of counties, by comparison, saw an increase in male mortality rates...."

And of course, Stiglitz's article does not offer a shred of evidence to support his headline claim that inequality is the cause of these things.

Most unforgivable is Stiglitz's flinging around of reckless and evidence-free charges of racism. If racism and inequality explain lower life expectancy, then how does Stiglitz explain the fact that Hispanics live much longer than whites and blacks?
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Peter Burgess Dec 13, 2015

Prominent economists bemoan the relevance of GDP as a meaningful metrics for socio-enviro-economic performance, but it stays in place with little effort to replace or complement the measure with something better. In my view, as long as money is the measure of success, then we are bound to have results that have negative impact on society and the environment. You must measure in order to manage, but you had better measure the right things!
Peter Burgess http://www.truevaluemetrics.org
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Albert Aftoora Dec 13, 2015

I am amazed that Dr. Stiglitz never once suggests that "personal responsibility" has a significant role in the bad health outcomes he describes for the African American community in the U.S. Rather he posits that "...these outcomes are the result of economic conditions..." If that were true no individual in the upper middle class would ever have a drug problem.
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Per Kurowski Dec 13, 2015

Professor Stiglitz writes: “Then came the financial crisis, which cost millions of Americans their jobs and homes.” But he does not explain that the financial crisis was caused by regulatory technocrats who had no idea about what they were doing, since that is not convenient to those who believe in state fixes for everything.

Here is the short explanation of what detonated the crisis.

In June 2004, the Basel Committee for Banking Supervision allowed banks to hold assets like securities rated AAA to AA against only a meager 1.6 percent in capital (equity) against these. That meant banks could leverage their equity (and the support they received from society) with the expected risk adjusted profit margin of these securities, a mindboggling 62.5 times to 1.

For instance, if banks thought they could earn a reasonable 1 percent expected risk adjusted return on such securities, then they would be expecting to earn a 62.5 percent yearly return on their equity.

Basel II regulations applied initially to European banks and, due to a decision taken by the Security Exchange Commission in April 2004, also to American investment banks.

This mother of all incentives set up the mother of all demands for AAA to AA rated securities collateralized with mortgages to the subprime sector. And it was really not the “good” mortgages that the intermediaries most wanted to securitize. The riskier the mortgage, meaning the higher interest rates it carried, the larger the profits derived from dressing it up as risk-free.

And of course it all had to explode.

Banks, left alone, supervised only by the markets, would find it hard to leverage more than 10 to 1. How difficult it would be for corporate cronyism to prosper if there were few regulations to game.

And the credit-risk weighted capital requirements for banks, which favor The Safe and discriminates against the fair access to bank credit of The Risky, is a major driver of inequality.

Let me quote from John Kenneth Galbraith’s “Money: Whence it came where it went”, 1975. “ The function of credit in a simple society is, in fact, remarkably egalitarian. It allows the man with energy and no money to participate in the economy more or less on a par with the man who has capital of his own”
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Richard Stewart Dec 13, 2015

Droves of diagnosis, paucity of prescription.

People who use suicide, drugs, and alcoholism in the same sentence should be pummelled relentlessly. Dr assisted suicide would be a good, not a bad. Illegal drugs cause deaths because they can only be purchased from criminals, with no recourse for poor quality. Imprisoning public drunkards is an expensive and inefficient medical treatment for alcoholism

If we removed some of the 93 Federal government incentives for remaining poor - means-tested benefits - perhaps there wouldn't be so many people who chose to remain poor. Refusing to give people food stamps if they have saved any money, now there's an idea only poverty lovers could support. And politicians. And some economists ... who prefer to live with their head in the clouds.
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David Neunuebel Dec 13, 2015

Great article and important but conspicuously absent is any prescription to change these dynamics. Perhaps the author's next article might do that.
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Bruce Bean Dec 13, 2015

How did the Bush Administration pass the Bankruptcy Act? With the votes of the following D's: Baucus, Bayh, Biden, Bingaman, Byrd, Carper Conrad, Inouye, Johnson, Landreieu, Lincoln, Kohl, Nelson FL, Nelson NE, Pryor,Reid, Salazar & Stabenow.

Joe, Not everything is about politics. Much in Washington is about lobbying. How about a little less politics and stick to economics?
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Eleanor Ching Dec 13, 2015

The good professor should be commended for writing this piece to highlight a very important issue in U.S.today, but it would have been better if he checked his arguments for sound logic and facts

For one, U.S. govt bond investors can't lose if there is lower interest rates after their investment...

Nevertheless, the problem highlighted deserves attention and resolution
- Robert Lunn Dec 14, 2015
  
  Nathan caught it but it's interesting to see how out of touch one can be on this issue. Maybe we should think about this as "culling the heard". Too many people in this segment so the market is curing the problem?
  I think the Fed has been exceptionally transparent on their policy. Since QE began, they have stated their goal was to use operations to increase assets values. Taking the risk out of the yield curve enabled, starting with the Fed, entities to borrow short and lend long (er) without risk. This was conveyed by the Feds language and remains so despite a modest raise this week.
  The evidence is compelling; look at the amount of money the Fed has returned to Treasury since QE began. (In fact, Congress is now trying to grab some for the Highway Bill.) This is after paying all expenses including deposits at the Fed by the member banks.
  They've succeeded in a broad context. Asset prices are higher, unemployment is 1/2 of the peak in this cycle. Even U-6 is showing signs of improving despite demographic head winds and hourly pay is improving slightly.
  On the other hand, most of the incremental income generation since they began has gone to the top. We've all seen the numbers. The Fed and the wealthy are the skewed beneficiaries of Fed policy. The carry trade requires significant wealth to participate.
  If the Fed has returned 500 billion or so back to Treasury through this policy, it should be easy to make an educated guess about the amount made by others who can play. Indeed, just use the income numbers.
  This policy by the Fed redistributes income from the many to the few.
  With no help on the fiscal side the trend will continue.
  What alternative did the Fed have to do a better job? I'm not sure those complaining about the Fed now would embrace any other plan nor should they as most of them have won. Yet, it's interesting to contemplate the "free market" solution of the 08-09 crisis. This problem seems less painful for the haves than the market would have delivered. It's probably , less painful for all.
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- Nathan W Dec 13, 2015
  
  "U.S. govt bond investors can't lose if there is lower interest rates after their investment".
  
  And then the renew at 0.25%. Which is less than 5%.
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James Mboya Dec 10, 2015

WHEN SHOULD THE FED BEGIN TIGHTENING? Writing for Bloomberg.com on Dec. 9, 2015 under the title, “No One Knows How Messy the Fed Increase Could Get,” the writers of this article, McCormick & Scaggs, stated the following: “The greatest monetary easing cycle in the history of the U.S. has left a mind-boggling amount of cash floating in the economy. Banks hold $2.5 trillion in excess reserves – money they essentially don’t know what to do with – at the Federal Reserve.”

The reason why inflation has not been picking up in the economy, something that shows that the economy is growing, is because all the money that has been pumped into the economy – trillions of dollars – has not been invested in the real economy but, is parked at the Federal Reserve as banks’ excess reserves. That is not good. I would therefore like to show how the economy can be raised without causing too much inflation (more than 2% for advanced economies) which is also not good.

First and foremost, the Fed should realize that very low interest rates are good for the economy of the United States and, the world’s. When interest rates are very low, large amounts of cash can be borrowed at the low interest rates and invested in the real economy – building new factories and equipment; upgrading existing factories and equipment; starting new businesses; building new roads and railroads; building new airports; building new ports; building new dams; and so forth.

When cash is invested in the real economy as mentioned above, the return on investment can be quite hefty, averaging 18%, for 40 years, or, two generations once they start generating income. The infrastructure investments mentioned above are the prerequisite for creating millions of new jobs that are needed all over the world. Also, in order for these investments not to be bankrupted during their inception, before they start generating income, interest rates will need to be very low so that they can be paid off in a timely manner.

But, since interest rates should be determined by the market forces of the demand and supply of investments, how can they remain at very low interest rates indefinitely? The first thing is for very low interest rates to be in effect. This condition has largely been met in almost all advanced and emerging economies. Nothing further needs to be done. Then, when the desired rate of inflation has been reached (2% for advanced economies; 3.5% for emerging economies; and 4.5% for developing economies), and, the natural rate of full employment has been reached (this varies with different countries but, is around 3.75% to 4.75% depending on the countries’ labor participation rate); only then, should the respective central banks begin tightening monetary policies by raising interest rates. And, most important, they should do so only in increments of 0.025%. This may seem like a very small amount but, when it is applied to the overall economy of a nation, these small increments result in very large aggregate amounts.

For example, during the recent Great Recession in the United States, from 2007 when the recession begun and GDP began to fall, to 2011 when GDP was restored to its prerecession levels, the output of the economy (GDP) fell by an average of 2% for the four years of the recession. That 2% was very, very big in a macro context, because very many people lost their jobs and trillions of dollars of wealth was eroded during the recession. The moral of the story is that even an increase of only 0.025% can have far-reaching effects. But, the effects of a 0.025% increment are manageable. Therefore, when policy makers feel that interest rates should be increased, they can increase the rates with another 0.025% in 30 days’ time. And, when they feel that the rate needs to be decreased, they can do so with another 0.025% within 30 days. There should be a 30-day period to study the effects of an increase or decrease in rates.

Having said that, the best way for the Fed to ensure that banks make more lending to the real economy, in the United States, and, around the globe; is to begin levying fees on the $2.5 trillion that banks have parked at the Fed. This new policy will incentivize banks to lend more cash to investors, who in turn will invest the same in the real economy as I’ve already stated. In addition, the Fed should issue a very clear forward guidance stating that it will only increase rates when inflation reaches 2% and unemployment falls to 4.5% to 4.75%, and, that it will be increasing or decreasing rates by increments of only 0.025%. Such a clear forward guidance will calm the markets.

Even though the new monetary policies that I am advocating above will result in savers not getting big returns on their money, these policies will ensure that higher paying jobs will be created all over the world and, that investors who invest with banks that lend money for the infrastructure projects that I’ve mentioned above will get pretty good returns. That’s because most of the new money will be created in advanced economies. And, these cash will be invested in the projects that I’ve mentioned above, which will give higher rates than all savings banks could give. For this reason, the $2.5 trillion that’s just sitting in the Fed can be used to lay the infrastructure of a new global economy and, the returns on investment will be quite good, averaging 18% for two generations.
- Joe Bongiovanni Dec 14, 2015
  
  "" is because all the money that has been pumped into the economy – trillions of dollars – has not been invested in the real economy but, is parked at the Federal Reserve as banks’ excess reserves.""
  uummmm, those Trillions are unit-of-currency denominated central bank 'reserves' and not money.
  money is unit-of-account denominated means of exchange for goods and services in the national economy, which reserves never are and never do.
  passing reserves between banks does nothing for either GDP or aggregate demand.
  the banks issue all the money in the economy (c.e.)
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Hiroshi Nagatsuma Dec 9, 2015

And U.S. is propagating their country illness to Asian world by TPP giving to give special rights to pharmacy and insurance companies beyond each country's law. This is an insane world beyond understanding of Erich Fromm.
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Mark Pitts Dec 9, 2015

Even More Disinformation:
The good professor correctly points out that Unemployment Compensation was designed to cover short-term bouts of unemployment (usually 26 weeks). But, he mentions this fact in the context of the financial crisis.
Did he "forget" to tell his readers that benefits were nearly quadrupled during that time to 99 weeks?
- Nathan W Dec 13, 2015
  
  99 weeks are over, and benefits still expire eventually. I don't see where the misinformation lies.
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Diego Orlandi Dec 9, 2015

maybe one problem is that one of the the US's main economic drives (if not THE one) in the last century was oil, an economic drive that burned far too quickly. diversifying technical know-how would probably be a good attempt - rather than investing so much on foreign policy. but clearly this requires more widespread education, and a series of other trends to take place, which seem to be opposite to the trends at work now (as this article basically seems to point out)
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Diego Salvatierra Dec 9, 2015

The author notes that the United States is on its way to becoming the "first former middle-class society." The author overlooks a country with many historical similarities to the United States: Argentina. As early as 50 years ago, it was a middle-class society of European immigrants. Today, many Argentines who live in poverty have grandparents who went to college and owned cars and their own homes. The causes of this decline are not fully understood, but poor public policy and populism were important. Why is it that the world ignores Latin America, when our experiences hear can teach so much about what (not) to do? Coverage of Latin American politics is scant at best in English language media. Even in Project Syndicate, Argentina's recent election, a potential bellwether of change for 600 million Latin Americans, received only one column.
- george sos Dec 11, 2015
  
  of course they are understoood(the reasons for what went on in latin america -and elsewhere )...it is calles world capital,IMF and bankers...The name of the beast...The name of the enemy of society.Enough with the theories about the benefit from trade...turning an argument on its head all along (economists do)..
  US rich are mad with fear.Fear they might have to share this world with the rest of us.And so ,since ever,they are trying to do exactly that ,using any means they have available(murder of whole nations included)...So much for caring ..
  Revolution is the way forward.Problem is who is going to lead it.and who is going to run society ,the way it has been distorted for far too long.In my view we can not fix this.Unless we tear it down and built it from scratch...But this is not going to happen ,so i swallow my tongue now..:):)
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Mark Pitts Dec 9, 2015

More Disinformation:
The author wants readers to believe that the high income of the 1% is the main problem of the 99%. But if, for example, half of all the 1 percenter's income was redistributed among the 99%, that would raise the latter's income by about 11%. Such an increase is hardly nothing, but not a game changer either.
Let's keep in mind too that the 1% is a constantly changing group. Few stay in that group for long.
- james durante Dec 9, 2015
  
  Mark Pitts is exactly wrong. There is actually little movement into or out of the top 1%. Their children are far more likely to attend elite institutions and, along with connections and inherited wealth, they are highly likely to remain in the top echelon of wealth holders. On the other end of the spectrum, those born into poverty have very little upward mobility. This is exacerbated by the massive defunding of social programs and affordable education that the 1% have ushered in over the last forty years along with massive tax breaks for themselves. But plutocracies are not sustainable.
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Gerald Silverberg Dec 8, 2015

While I agree with the main thrust of this article (although statistical quibbles have been raised about the effect demographics on Case and Deaton's data), I must take issue with this statement:
"Those who had invested in the stock market saw much of their wealth wiped out; those who had put their money in safe government bonds saw retirement income diminish to near zero, as the Fed relentlessly drove down both short- and long-term interest rates."
Stock markets recovered to their 2008 peak by 2013, and if you had locked into government bonds before 2008, your net worth only went up as interest rates declined. Thus the top 10%, whose net worth is mostly in such assets, came out unscathed. The equity of most of the rest of the population was in their homes with mortgages that needed to be continually serviced or face foreclosure. It was this part of the population, middle and working class, that was devastated by the crisis, not stock and bond holders.
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Mark Pitts Dec 8, 2015

So Much Disinformation!
Prof. Stiglitz states, "The median income of a full-time male employee is lower than it was 40 years ago."
It this true? Not really:
(1) Most workers have had substantial increases in total compensation (meaning wages + benefits) in recent decades. The simple fact is that most of the increases in total compensation have been in terms of increases in employer-paid health care, not in wages per se.
(2) The calculations leave out the vast increases in recent decades in social services afforded to the working poor. For example, where I live (NJ), a childless couple making $25K a year is entitled to State and Federal benefits (health care, energy assistance, food benefits) valued at approximately $20K per year. This brings their true income to about $45K per year. This is ignored in the calculations.
In his rush to condemn, Prof. Stiglitz simply ignores economic reality.
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G. A. Pakela Dec 8, 2015

is not inequality a fundamental aspect of the human condition? Those who are at the very top of their profession, whether it be sports, entertainment or business are going to be able to extract a large sum for their services and there will be no shortage of individuals willing to pay. Our society has become more market-driven than ever before, and it is the average consumer that determines the success or failure of firms. Sears and Kmart are almost gone, Best Buy is not what it was, General Electric and Microsoft haven't done anything in well over a decade for shareholders. If you had owned all of General Electric or Disney, what would you have been willing to pay Jack Welch or Michael Eisner out of the profits they generated? As far as the compensation of investment bankers and hedge fund managers, I don't believe that the price of their services are coming from my income or that of the average American.
- Robert Lunn Dec 15, 2015
  
  Wait, all I've heard in the last 7 years is exactly the opposite. Has Obama taken us to European socialism or not? I'm confused.
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Denis Drew Dec 8, 2015

THE SIMPLE, EASY-TO-DO WAY TO SAVE THE MIDDLE CLASS -- AND RAISE THE UNDERCLASS (especially raise the underclass) -- cut and paste:

Forget monetary and/or fiscal policy — it’s the labor-market policy, stupid (to all of us; to borrow a familiar phrase from somewhere).

As long as unopposed ownership monopsony (unopposed by labor union monopoly) mercilessly squeezes wages and benefits down …

… squeezing what is squeezed out of labor to the top 1% or so who cannot spend it as fast as we shovel it to them: think squeeze a toothpaste tube in the bottom and it all comes out the top; it’s a kind of physics — THINK $100,000,000 QBs, $20,000,000 CEOs, ETC., ACTUALLY REDUCING DEMAND …

… squeezing so much out of the bottom that too many (very many) lives become less educated, less healthy, LESS PRODUCTIVE, or more dysfunctional to the point we have to spend wildly on police and jails to chase some around ...

... or squeezing so much out of wages of former middle class jobs that people end up on the bottom because they refuse to work AT ALL for “chump change” wages: think me, American born former taxi driver (okay I’m too old now — but I wouldn’t do it if I could) who wouldn’t work for $500 a week (if they do that well today) for a job that used to pay $800 a week for 60 hours.
* * * * * *
THIS LAST TAKES A LITTLE DEVELOPMENT. Today’s Chicago gang bangers (Spike Lee shows his usual, what I call “rich white boy from Columbia University” self in his latest movie — knows nothing about the poor side of town like John Singleton or Mario Van Pebbles do -- disclosure: I have five Irish grandparents counting my mother's stepmother, but I'm from the old crime ridden Bronx) would gladly labor for the equivalent of $200 a week, 100 years ago. Because, that would have been all the less productive economy of that former time could have paid. Today’s 100,000 Chicago gang bangers (out of my guesstimate 200,000 Chicago gang age, minority males) wont work for $400 a week for jobs that today’s economy should be able to pay $600 to $800 a week for (e.g., retail clerk).

At my old Teamsters Union local 804 (Gimble’s furniture warehouse) we spent half the day breathing hard and wet with sweat for $800 a week — in 1970; when per capita income was 66% of today’s. Today’s 804 UPS drivers do $1200 a week, “breathing hard” — the market demands a lot from them but at least they get paid commensurately.

The beauty of collective bargaining -- very probably needed to be under-girded by centralized bargaining to keep the balance between monopsony and monopoly right -- is that it informs you that you have squeezed out the last penny the ultimate consumer is willing to pay) — so you have that natural incentive to give your work all you’ve got.

A lot of it seems to be the psychology too, stupid (just to use a familiar phrase :-] — see snake head) ON THE DYSFUNCTIONAL SIDE OF TOWN.
* * * * * *
Until the American labor market is rescued from it’s pathological union-free condition there will be no change in direction from the gradual descent into demand stagnation and even human dysfunction(and of course progressive political impotence).

Easy-to-do: just start up in most progressive states, moving to less progressive states of the union treating labor market muscling and manipulation as seriously as every other form of market warping: MAKE UNION BUSTING A FELONY, backed by RICO prosecution for persistent abuse. Couldn't be easier.

The laws are already in place; the issues presumably settled; the laws are curiously missing one thing: dentures. :-)

It’s really all boils down to a matter of freedom, doesn't it — freedom to chose to collectively bargain?
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Procyon Mukherjee Dec 8, 2015

Economic inequality is a result, the process starts with a range of things that leads to this denouement. But when the whole genesis lies in perpetuating a belief that there will be very few winners and a large number of losers, then such a system cannot be self-sustaining; the very large body of losers are lauding their misery when they passively co-create a culture of casinos where luck is retained by only the very few.

This is not Capitalism that we believed in.
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Michael Public Dec 8, 2015

The decline of the American middle class is caused by the very thing that Americans celebrate as the reason for the economic superiority. The idea that business must be allowed absolute freedom. When business is given freedom it simply uses its economic power to 'capture' all other realms of society for its benefit - health, education, government, regulation, media and public assets. Americans had this philosophy before, and it ended in the Great Depression - now this ideology is seemingly bankrupt again they (boths GOPS and DEMS) cannot see it, explaining away the problem as lack of effort, misfortune, bad apples or conspiracies. Without resorting to communism it is time to put business in its place, which is purely the realm of business, and to prevent it from invading other parts of our society.
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Michael Public Dec 8, 2015

While I strongly believe that all racial groups should be treated equally and have absolute equality before state and god I question whether all races are equal in ability - take for instance sports like 100m sprint and basketball that are dominated by blacks while all other races simply do not feature. This is why I find it extremely difficult to accept the use of statistics to imply racism in the realm of economics.
- Max Isert Dec 8, 2015
  
  Good point, Mr. Public. Quotas can be problematic and reduce quality, efficiency, etc. I think the problem goes even deeper, and Mr. Stiglitz is correct on the inequality issue, but more accurately than it just being a racial discrimination against non-White minorities we are experiencing, it has actually increasingly become an economic/oligarchic discrimination traditional Americans are facing. Affecting both European Americans and African Americans equally severely. Here more from Ron Unz. He correctly states, that we have the worst of both Worlds at the moment, no real Meritocracy and neither true Egalitarianism. We currently have Oligarchy: ''Problems with Pure Diversity and Pure Meritocracy
  
  In recent decades, elite college admissions policy has frequently become an ideological battlefield between liberals and conservatives, but I would argue that both these warring camps have been missing the actual reality of the situation.
  
  Conservatives have denounced “affirmative action” policies which emphasize race over academic merit, and thereby lead to the enrollment of lesser qualified blacks and Hispanics over their more qualified white and Asian competitors; they argue that our elite institutions should be color-blind and race-neutral. Meanwhile, liberals have countered that the student body of these institutions should “look like America,” at least approximately, and that ethnic and racial diversity intrinsically provide important educational benefits, at least if all admitted students are reasonably qualified and able to do the work.
  
  My own position has always been strongly in the former camp, supporting meritocracy over diversity in elite admissions. But based on the detailed evidence I have discussed above, it appears that both these ideological values have gradually been overwhelmed and replaced by the influence of corruption and ethnic favoritism, thereby selecting future American elites which are not meritocratic nor diverse, neither being drawn from our most able students nor reasonably reflecting the general American population.'' - http://www.theamericanconservative.com/articles/the-myth-of-american-meritocracy/
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Natarajan Balaji Dec 8, 2015

Capitalism insists on effieciency in terms of money only.. Not in terms of happiness or equality...
Hence to maximise the profit, exploitation takes place. Colonialism existed for exploitation.. Now economic exploitation takes place in form of currency wars, loans etc.
Africa and Asian countries are suffering even now because of European exploitation..
As long as exploitation continues, inequality exists..
Change in economic outlook is needed.. Money is not the only criteria for development.
Happiness and peace should be criteria for development.
Whichever country is wealthy now like US, should export happiness and peace to countries where they are needed instead of going to war and giving loans. Loans is also exploitation.
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Steve Hurst Dec 7, 2015

I would venture to say that overindulgence is the driving factor. That excess is the secret of the distress

The sum of working hours and watching tv has been a constant over time and working hours have dropped. Work has generally become more sedentary, tv watchi ng is sedentary

A number of studies have shown obesity follows affluence as increased processed food consumption follows affluence
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Victor Douglas Dec 7, 2015

Lower-middle class Americans have big houses, big refrigerators, and big cars, and walk very little. They get fat and die earlier. In much of Europe, they live in apartments, walk to the bus or train, eat fewer snacks, and live longer. It is this, not medical care, which is adequate in both places, which makes the difference in life expectancy.

Greater income equality in America will not make lower-middle-class people give up their big cars or their big refrigerators or their single-family houses.

Prof. Stiglitz knows as little about most of America as the author of "What's the Matter With Kansas."
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M M Dec 7, 2015

Inequality can never be eradicated, not all humans are born equal. There are wide gaps in civic societies albeit socially, financially, educationally and so on. One solution to inequality could be by going back to basics, when families and communities supported one another, but then you will have “Uncle Sam” interfering to mess it all up, as is usually the case. So in short…..no solution to inequality.
- george sos Dec 11, 2015
  
  inequality might not be "natural" by birth but i hope you can see it is humane.And where nature creates disadvantages,we as humans should help balance them out.Sharing is the name of the game.....But to play it you need to have a basic quality...be human.
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- M M Dec 9, 2015
  
  Thank you very much Mr Hermann for agreeing with me. Actually, I’ve been researching this subject of inequality for quite some time now. As one of our fellow commentators above quite rightly stated, the wide gap between the 1% (the haves) and the 99% (the have not), is indeed one factor. Another factor is the rise in “Big Government” apparatus (being funded directly or indirectly by the 1%). Today, Governments in leading economies are acting as profit centres, generating business and profits, and by doing so they have created an “unfair competitive” ground in the market place that has had a negative impact on opportunities and on entrepreneurship, thus leading to the stagnation of certain world economies since the crisis of 2008 and leading to shortages of real job / work opportunities / prospects for the middle class, which has shrunk significantly ever since. In short, another solution could be the reviving of the middle class through “real support to private entrepreneurship” (e.g. without government meddling) and by doing so, the middle class will gradually grow again and become the engine of real growth and real opportunities rather than “Big Governments” which in turn will help reduce inequality which in my view can never be eliminated 100%.
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- Zsolt Hermann Dec 9, 2015
  
  I fully agree with you, natural differences, natural inequality will never disappear.
  This is not the problem.
  
  The problem is the artificially generated, vastly increased inequality as a result of the gigantic Ponzi-scheme we are all part of.
  In order to fuel the illusory constant quantitative growth paradigm those at the top need to brainwash people to keep consuming things they do not need and they do not have means for.
  Thus the masses are tricked twice, to keep shopping and to keep taking debt while a small minority skims the extra profit.
  Again profit is not bad, but the extra "undeserved" profit is.
  
  The inequality we are observing is just one of the symptoms of this unnatural human bubble which is bursting as it is impossible to keep sustaining something unnatural within a natural system.
  As you suggested the solution is a return to natural desires, natural necessities, living based on available means and succeeding through mutually supportive environments.
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dan baur Dec 7, 2015

Where are the supporting charts Mr. Stiglitz?

Have you considered that equality in poverty (aka Socialism) is far worse than inequality in a prosperous society?

Why not propose solutions to raise the poor without pushing down the whole society. We have plenty of resources for everyone in this country and in the world.
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dan baur Dec 7, 2015

The links shown do not support the assertions. The closest I came to relevant charts is this: http://www.ncbi.nlm.nih.gov/books/NBK321304/ , which for some reason compares only the 1930 and 1960 cohorts. Everyone has made progress except the bottom 20% of income which has been stable. This doesn't support Stiglitz and his conclusions.

Comparison between USA and France is meaningless - there are too many uncontrolled differences.

"dying earlier as their incomes decline" - what does this even mean? Who's income has declined? Does that include transfer payments? The link provided is misleading.

What relevance has the bankruptcy law? No connection is demonstrated.

What relevance has 1990s Russia? Again, there are too many uncontrolled differences between USA today and Russia then.

"white Americans’ declining health status" - according to NYT, this is in a narrow segment of 45-54 year old, and is due to more alcohol, drugs, and suicides, not to "inequality".
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Max Isert Dec 7, 2015

Important when we look at the 1% is also to realize, that the Ivy League still produces the bulk of the American elite and leadership, and I came across a very interesting article by Ron Unz from 2012 titled ''The Myth of American Meritocracy'': http://www.theamericanconservative.com/articles/the-myth-of-american-meritocracy/

The most startling discovery for me in this article was the following... highly controversial, but I think we need to look at this data, in order to be able to reform and diversify the American 1%, and to understand what went wrong with the American elites over the last several decades: ''[...]Most of the other Ivy League schools appear to follow a fairly similar trajectory. Between 1980 and 2011, the official figures indicate that non-Jewish white enrollment dropped by 63 percent at Yale, 44 percent at Princeton, 52 percent at Dartmouth, 69 percent at Columbia, 62 percent at Cornell, 66 percent at Penn, and 64 percent at Brown. If we confine our attention to the last decade or so, the relative proportion of college-age non-Jewish whites enrolled at Yale has dropped 23 percent since 2000, with drops of 28 percent at Princeton, 18 percent at Dartmouth, 19 percent at Columbia and Penn, 24 percent at Cornell, and 23 percent at Brown. For most of these universities, non-white groups have followed a mixed pattern, mostly increasing but with some substantial drops. I have only located yearly Jewish enrollment percentages back to 2006, but during the six years since then, there is a uniform pattern of often substantial rises: increases of roughly 25 percent at Yale, 45 percent at Columbia, 10 percent at Cornell, 15 percent at Brown, and no declines anywhere. [...] We are therefore faced with the clear conundrum that Jewish students seem to constitute roughly 6 percent of America’s highest-ability high school graduates and non-Jewish whites around 65–70 percent, but these relative ratios differ by perhaps 1000 percent from the enrollments we actually find at Harvard and the other academic institutions which select America’s future elites. Meanwhile, an ethnic distribution much closer to this apparent ability-ratio is found at Caltech, whose admissions are purely meritocratic, unlike the completely opaque, subjective, and discretionary Ivy League system so effectively described by Karabel, Golden, and others.[...]''
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Tamer Kirac Dec 7, 2015

Stiglitz's summary of Deaton's findings summarize a widely known fact, that economic disparity and associated poverty results in shorter life span due to various reasons. Among the G20, USA ranks as one of the highest spenders for health care and at the same time as having one of the highest infant mortality rates and shortest life spans. Broken down by race and income category, provides the answers!
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Paul Daley Dec 7, 2015

Stiglitz needs to go a little further and identify the problem. I see it as at least in part a problem with segmented credit markets where those with property can get access to credit at much lower rates than those that have only incomes. That's natural to some extent; secured lending should be cheaper. But the difference has become outrageous as central banks have pumped more and more money through asset markets in the hope that wealth effects would eventually produce some stimulus for the real economy. The result, because wealth effects are so small and so slow acting, has been booming asset markets, but relatively stagnant income flows.

Central Banks desperately need to find a secure means of lending against income that is entirely within their control. If they don't find one, they will likely remain entangled in political arguments about the scale of government, and will continue to serve up a devil's brew of rising inequality and financial instability.
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Nurbek Achilov Dec 7, 2015

GDP shows an average indicator. Without implementation of a single system of human data for statistical analysis, it will be not possible to evaluate the real issues in the economy and adequately react. Today, statistical instruments are wrong, the whole methodology should be reevaluated and uptaded. On global level, there are even more issues with overpopulation, overproduction and lack of resources (energy, food and etc.). All linked again better statistics and better desion systems which in turn help up with taxation policy on wealth, control of multinatinal corporate allocations and etc.
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William Wallace Dec 7, 2015

The disappearing middle class certainly has some relation to fiscal policy and social programs. Yet the core decline owes mostly to the combination of offshoring, advanced mechanization, and the decline of unions. The second is the most worrisome, as it has no or very few remedies in policy. Whereas the industrial revolution could generate jobs owing to an explosion of physical goods, the information revolution mostly shifts the labor for those goods to capital, and the trend is increasing rapidly.

It would be nice to hear from Mr. Stiglitz on this issue.
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arnim holzer Dec 7, 2015

Agree that all GDP data should be examined with an eye towards quality and reform measures. Interestingly, the quality evidence discussed herein really emphasizes the structural malaise the US and many of the developed nations are facing. Policymakers have depended on central banks for too long. It is time for policymakers to create dynamism in infrastructure, healthcare, and education. Disruptors are winning all over the place because they disintermediate archaic regulatory structures and innovate where policymakers have not figured out yet how to limit progress. Its time for policymakers to do their job...
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Curtis Carpenter Dec 7, 2015

But what to do, Mr. Stiglitz?
- Michael Public Dec 8, 2015
  
  The decline of the American middle class is caused by the very thing that Americans celebrate as the reason for the economic superiority. The idea that business must be allowed absolute freedom. When business is given freedom it simply uses its economic power to 'capture' all other realms of society for its benefit - health, education, government, regulation, media and public assets. Americans had this philosophy before, and it ended in the Great Depression - now this ideology is seemingly bankrupt again they (boths GOPS and DEMS) cannot see it, explaining away the problem as lack of effort, misfortune, bad apples or conspiracies. Without resorting to communism it is time to put business in its place, which is purely the realm of business, and to prevent it from invading other parts of our society.
  A new reply to this comment has been posted.
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