From a video at New Deal 2.0 (h/t Mark Thoma), a project of the Franklin and Eleanor Roosevelt Institute. The whole thing is good, but I think Stiglitz does a good job making a somewhat similar diagnosis to that of Richard Wolff, albeit without the Marxian solution. The excerpt I want to point out begins at 2:55.
The other part, obviously, that was absolutely key to the New Deal was a sense of social justice, fairness, whatever word you want to use. The New Deal had some very important social programs. One of the reasons why the economy, I think, has been doing poorly is because of the growing inequality. People at the bottom have not been doing very well, but we told them to consume as if they were doing well, by borrowing. But that was not a sustainable business model.
Anyways, I know that Stiglitz is not Richard Wolff, but it always strikes me when “the gap” analysis comes out from neoclassical economists. Of course, the work of those like Emmanuel Saez and Paul Krugman (whose nobel work is not explicitly related to inequality, but whose more recent work is tangentially), is gaining increased airing in mainstream academia. This is a positive development. I read that Obama even had dinner with Krugman and Stiglitz last night. These are the sorts of people he should be listening to, as opposed to Bob Rubin or Larry Summers, because they are outsiders. It would be great if he had dinner with Wolff or Resnick or Naomi Klein, but that is wishful thinking at this point.