:00:14. > :00:21.the first time. -- shown. Time for World Business Report.
:00:21. > :00:25.Welcome to the programme. The markets after Mario Monti it.
:00:25. > :00:29.The man credited with stabilising the Italian economy says he is
:00:29. > :00:33.available to lead a future Italian government. Joseph Steve Lewis
:00:33. > :00:39.tells us wh tells us wh between the rich and poor is widening. --
:00:39. > :00:41.Joseph Stiglitz. The Japanese yen weakens as the
:00:41. > :00:51.Prime Minister in waiting his at revising the law that guarantees
:00:51. > :00:58.
:00:58. > :01:01.the central bank's independence. -- hints at. Mario Monti says he is
:01:01. > :01:05.available to lead Italy if a coalition is formed in support of
:01:05. > :01:10.his agenda but he will not run in the forthcoming election. Reaction
:01:10. > :01:14.to that has been mixed, with critics saying he was too vague and
:01:14. > :01:19.supporters thankful that he remained in the fray. Unemployment
:01:19. > :01:24.now stands above 11% and rising. That will play into the hands of
:01:24. > :01:27.his rival, Silvio Berlusconi. As entrenched
:01:27. > :01:31.entrenched in recession and austerity measures have hit the
:01:31. > :01:37.population very hard. Internationally and on the markets,
:01:37. > :01:43.Minicredit Mario Monti with stabilising the economy. -- many
:01:43. > :01:51.people credit Mario Monti. The cost of borrowing fell under the can't -
:01:51. > :01:55.- under his leadership. Thank you for joining us. Looking at this
:01:55. > :02:00.statement that he is made, it seems uncertain. Why would he not stand
:02:00. > :02:09.in his own in his own a candidate? is not actually standing or running
:02:09. > :02:16.officially because he has seen the Italian population i
:02:16. > :02:20.supportive of him. At best, they give him or a coalition that would
:02:20. > :02:25.support him 15% of the actual vote and that is not enough to guarantee
:02:25. > :02:30.that he can the Prime Minister again. If he runs in the election
:02:30. > :02:38.and is not able to form a government, he will not be able to
:02:38. > :02:42.become Prime Minister again because... It seems something of a
:02:42. > :02:49.catch 22. On the one hand, there are reasons why he should not stand
:02:49. > :02:52.he says he will support a party that follows austerity and we know
:02:52. > :02:59.that austerity measures are extremely unpopular in Italy.
:02:59. > :03:04.is correct. In fact, he does not want to run officially and the
:03:04. > :03:13.parties that what austerity will not get a lot of votes. At the same
:03:14. > :03:23.time, we know the probability of having a hung parliament with a
:03:23. > :03:31.might be pulled back by the left, the right, the centre, whatever
:03:31. > :03:34.bring together, like in Greece. there is some kind of a hung
:03:34. > :03:39.parliament, will it be the markets that the sight this? Nobody is
:03:39. > :03:49.wanting uncertainty. 2012 was the year of grace. Nobody wants that to
:03:49. > :03:50.
:03:50. > :04:00.repeat with Italy. -- year of Greece. Mario Monti became prime
:04:00. > :04:01.
:04:01. > :04:07.minister because of market pressure. Bonds went very high. They were
:04:07. > :04:11.super high at one point. That is probably still the key to having a
:04:11. > :04:15.change in t change in the moment, it is fair to say that the
:04:15. > :04:20.markets are not putting any pressure on pressure onn addition,
:04:20. > :04:28.that is why things are so relaxed at the moment and there is such a
:04:28. > :04:32.lack of clarity. And it is the end of the year as well. Thank you.
:04:32. > :04:35.The challenges facing Mario Monti and the Italian political system.
:04:35. > :04:38.The issue of wealth inequality was back in the spotlight this year
:04:38. > :04:44.after more protests around the world highlighting the gap between
:04:44. > :04:49.the rich and the poor. The top 1% of American households have seen
:04:49. > :04:53.their income almost quadruple over the last 30 years. However, at the
:04:53. > :04:59.bottom end of the scale, in comes have barely changed. What is behind
:04:59. > :05:05.that growing gap between the haves correspondent spoke with the former
:05:05. > :05:13.and the former Nobel Prize and the economist J economist Jglitz and asked
:05:13. > :05:21.how ever did inequality had become approximately 20% of all the income
:05:21. > :05:25.in the US, has approximately 30% of all the wealth and while they have
:05:25. > :05:35.been doing very well, the rest of the country has not. The recession
:05:35. > :05:42.has made things even worse for them and the recession recovery. 93% of
:05:42. > :05:47.the financial gain went to the top 1%. What contributes to this?
:05:47. > :05:53.Markets do not exist in a vacuum. We have all kinds of laws that
:05:53. > :06:00.shape our e shape our ed the way they has been to favour the very top and
:06:00. > :06:03.we have seen that in our financial markets, where the bank has walked
:06:03. > :06:11.off with you mongers bonuses while the rest of America was left
:06:11. > :06:14.picking up the pieces -- with massive bonuses. Chief executives
:06:14. > :06:17.of companies were able to walk away with larger shares of the corporate
:06:17. > :06:23.time not because they are more productive but because they have
:06:23. > :06:29.mastered the art of taking a larger part of the corporate income for
:06:29. > :06:34.themselves. How can this change? Will anything changed? The irony is
:06:34. > :06:43.that as the income inequality has got larger, we have been doing less
:06:43. > :06:48.marginal marginal tax rates of 70%. Now they
:06:48. > :06:53.are at 35%. If you make your money by carried interest, capital gains,
:06:53. > :07:01.the taxes UK are even lower than that. Mitt Romney, one of the
:07:01. > :07:06.presidential candidates, paid taxes on his reported income, keeping
:07:06. > :07:14.much of that outside the US, of only 14%. Other people making
:07:14. > :07:19.their their living, were paying 28%, 35%.
:07:19. > :07:25.We clearly have a system that does not correct to the inequality and
:07:25. > :07:28.actually encourages a distortion in our economy. What are the long-term
:07:29. > :07:32.implications, especially when it comes to the fallout for the wider
:07:33. > :07:37.economy? America has always characterised itself as a land of
:07:37. > :07:45.opportunity, the land of the American Dream, is a myth. It is no
:07:45. > :07:51.longer true. And we have less industrial countries. What that
:07:51. > :07:58.means is that a child's life prospects are more dependent on the
:07:58. > :08:03.income and education of its parents than in the UK, much less than in
:08:03. > :08:10.the Scandinavian countries. If you are born to poor parents, the
:08:10. > :08:16.likelihood is that you will remain poor and that means that we are
:08:16. > :08:20.wasting one of our most valuable resources, our human potential.
:08:20. > :08:24.Joseph Stiglitz in conversation with our correspondent. The
:08:24. > :08:34.Japanese yen has weakened it today after some rather forceful comments
:08:34. > :08:37.
:08:37. > :08:43.from the new kind minister -- Prime Minister. What was he saying?
:08:43. > :08:48.Shinzo Abe has been saying that he wants the Bank of Japan to set an
:08:48. > :08:55.inflation target of 2%. Of course, he has now been elected and will be
:08:55. > :08:58.weekend on local television, he said that if the Bank of Japan
:08:58. > :09:03.refused to set this inflation target, he would consider revising
:09:03. > :09:06.the legislation that currently guarantees its independence. If
:09:06. > :09:10.that were to happen, it would mean that the government could put
:09:10. > :09:14.direct pressure on the central bank to implement all kinds of measures
:09:14. > :09:18.including what Shinzo Abe has been suggesting, which is unlimited
:09:18. > :09:21.monetary easing - printing more money. That would flood the market
:09:21. > :09:27.with extra Japanese yen, which he says would encourage people to
:09:27. > :09:33.spend more money to boost the economy. In addition, it would also
:09:33. > :09:38.devalue the Japanese yen. It is not as the prime minister in waiting,