Report by Clinton Adviser Proposes ‘Rewriting’ Decades of Economic Policy

Joseph E. Stiglitz, winner of the Nobel Prize in Economics, spoke during the Swiss International Finance Forum in Bern, Switzerland, last year.Credit Peter Klaunzer/European Pressphoto Agency

Hillary Rodham Clinton has not yet presented her economic agenda, but one of the economists she has turned to for advice has published an aggressive blueprint for rewriting 35 years of policies that he says have led to a vast concentration of wealth among the richest Americans and an increasingly squeezed middle class.

“It’s not just a matter of redistribution,” said Joseph E. Stiglitz, a Nobel laureate in economics who has been an influential adviser to the Clinton campaign and will present his report on Tuesday. “Rewriting the rules of our market economy would reduce inequalities in market incomes.”

The report, published by the Roosevelt Institute, a liberal think tank in Washington where Mr. Stiglitz is chief economist, will likely influence Mrs. Clinton’s agenda.

Several proposals by Mr. Stiglitz, including raising taxes on capital gains and a push to make corporations less focused on short-term quarterly returns, are in line with what Mrs. Clinton is expected to embrace in her campaign.

She has already spoken about other proposals in the report, like reforming the criminal justice system, an immigration overhaul and paid sick and family leave

But the thrust of the report, titled “Rewriting the Rules of the American Economy: An Agenda for Growth and Shared Prosperity” and scheduled to be presented at a panel discussion in Washington, is a scathing indictment of 35 years of economic policies. (Besides Mr. Stiglitz, scheduled panel participants include Senator Elizabeth Warren of Massachusetts, Mayor Bill de Blasio of New York and other liberal leaders.)

In an interview, Mr. Stiglitz said it was not just “trickle down” economics associated with Republicans that have caused inequality, but policies advanced during the Clinton administration, in which he served as chairman of the Council of Economic Advisers.

“I was there when some of the decisions were made, and some of them were made in good faith,” Mr. Stiglitz said. “But here we are, and let’s not point fingers.”

Mrs. Clinton has talked about the perils of “short termism,” when corporations participate in stock buybacks rather than investing in employees and communities. The report proposes closing performance-based tax loopholes for chief executive compensation and enacting a financial transaction tax to reduce short-term trading.

In the interview, Mr. Stiglitz called such policies “predistribution,” which has a somewhat less stinging political connotation than redistribution. “It’s about how our market functions before taxes,” he said, though the proposal includes overhauls to the tax system.

The report, he said, is larger than any presidential candidate or administration and is designed to urge leaders in both parties to fundamentally rethink the decades of policies that have led to 15 years of stagnant wages for middle-class earners and an economy that favors the wealthiest Americans.

“If somebody said, ‘I have this wonderful idea of a new economic policy that will ensure over the next quarter century that people at the top get all the gains and people in the middle see their income stagnate and people at the bottom see their wages shrink,’ you can’t imagine people saying ‘Oh, that sounds like a great idea,’” Mr. Stiglitz said.

http://www.nytimes.com/politics/first-draft/2015/05/12/report-by-clinton-adviser-proposes-rewriting-decades-of-economic-policy/?_r=0