Vulnerability

Joseph E. Stiglitz (one of the few economists I respect) :

"It used to be thought that America's greatest strength was not its military power, but an economic system that was the envy of the world. But why would others seek to emulate an economic model by which a large proportion -- even a majority -- of the population has seen their income stagnate while incomes at the top have soared?

...  The recent economic downturn eviscerated the wealth of many. In the U.S., even after the stock market recovery, median wealth fell more than 40 percent from 2007 to 2013. That means that many of the elderly and those approaching retirement worry about their standards of living. Millions of Americans have lost their homes; millions more face the insecurity of knowing that they may lose theirs in the future.

These insecurities are in addition to those that have long confronted Americans. In the country's inner cities, millions of young Hispanics and African Americans face the insecurity of a dysfunctional and unfair police and judicial system; crossing the path of a policeman who has had a bad night may lead to an unwarranted prison sentence -- or worse.

Europe has traditionally understood the importance of addressing vulnerability by providing a system of social protection. Europeans have recognized that good systems of social protection can even lead to improved overall economic performance, as individuals are more willing to take the risks that lead to higher economic growth.

But in many parts of Europe today, high unemployment (12 percent on average, 25 percent in the worst affected countries), combined with austerity-induced cutbacks in social protection, has resulted in unprecedented increases in vulnerability. The implication is that the decrease in societal well-being may be far larger than that indicated by conventional GDP measures -- numbers that already are bleak enough, with most countries showing that real (inflation-adjusted) per capita income is lower today than before the crisis -- a lost half-decade.

... Regardless of how fast GDP grows, an economic system that fails to deliver gains for most of its citizens, and in which a rising share of the population faces increasing insecurity, is, in a fundamental sense, a failed economic system. And policies, like austerity, that increase insecurity and lead to lower incomes and standards of living for large proportions of the population are, in a fundamental sense, flawed policies."

Read in full : http://www.huffingtonpost.com/joseph-e-stiglitz/the-age-of-vulnerability_b_5978122.html.

How many more years, or even decades, are going to be lost because politicians adhere to heretical economic and financial principles ? The system is rotten and disintegrating. The future remains extremely bleak.