As the American economy continues to climb out of its 2008 financial crisis lows, the disappearing middle class remains a problem, said a top Indian official Tuesday afternoon.

In a lecture entitled “Are Capitalism and Democracy Failing Us?” India’s chief economic adviser Raghuram Rajan said the crisis was caused by policies with short-term visions intended to increase equality rather than elitist or corporatist policies. Because of their lack of long-term vision, the income equality policies did not provide a longterm solution to the income gap and ultimately contributed to the disappearance of the middle class — a trend Rajan said will be hard to reverse. The talk, which drew over 100 students and New Haven residents, garnered positive responses from audience members interviewed.

“The elite across the world are doing very well, while the people who were falling behind and were ostensibly to be helped by these policies are even worse off,” Rajan said of the short-term economic equality policies.

Rajan said the United States has not completely resurfaced since the financial downturn because the middle class has disappeared following a decrease in skilled routine jobs, like low-level clerk positions, and unskilled routine work, like textile production jobs. These jobs disappeared with the rise of advanced technologies and outsourcing, Rajan added. The American workforce is currently dominated by non-routine skilled laborers, like doctors or lawyers, and non-routine unskilled workers, like gardeners and fast food cooks, further expanding the split between extreme upper and lower classes.

Rajan said the widening income gap causes the lower class to overspend in an attempt to keep pace with the wealthy, thereby accumulating more and more debt, as has been the case “in areas with greater income inequality” across the United States.

“We need to combat this, not just the perception, but the reality that, in fact, there is a bifurcation of ways in many industrial economies,” Rajan said. “A way for those who go to elite schools, who come from elite families, who have access to wonderful jobs, and a different way for those who have never been to all these places, a way, which typically leads down rather than up.”

Rajan, who previously said industrialized economies still stand a chance of restoring their middle classes by focusing on education, rather than through large-scale government intervention in the economy.

A strong middle class is necessary to balance capitalism with democracy and make a full recovery from the effects of the global recession, Rajan said. In an attempt to illustrate the effects of middle-class resurgence on recovering industrial economies, Rajan referred to the United States’ and the United Kingdom’s respective growth after World War II. Following a number of measures that contributed to a healthier middle class — including increases in construction in Europe, restoration of trade activity and a heavy focus on education — the United States and the United Kingdom were able to emerge from the damage caused by both WWII and the Great Depression, Rajan said.

Four audience members interviewed said they enjoyed the talk. Maya Major ’15 said she appreciated that Rajan discussed modern politics rather than just abstract theory.

“[Rajan] was very enlightening about the effects of elite capitalism and how it is affecting the middle class,” said Paul Michaelson, another attendee.

Rajan’s most recent book, “Fault Lines: How Hidden Fractures Still Threaten the World Economy,” won the Financial Times’ Business Book of the Year award for 2010.