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Posted on 10/13/2003 8:27:27 AM PDT by Brian S
Mon October 13, 2003 08:14 AM ET By Pedro Nicolaci da Costa
NEW YORK (Reuters) - Nobel-winning economist Joseph Stiglitz is best known for his scathing critique of globalization's effect on the world's poor, but now he has turned his ire on an unlikely new target -- himself.
Last year, Stiglitz's book "Globalization and its Discontents" took aim at the World Bank and International Monetary Fund's policies, making him something of a celebrity economist in places like Latin America.
But some in Washington complained that he accepted too little blame for how the bank's policies were shaped when he served as its chief economist.
Now the Columbia University professor's new book "The Roaring Nineties" says President Bill Clinton's economic team, in which he played a key role, doomed the very recovery they had tried to engender by equating the interests of Wall Street with those of the nation at large.
"It was an overly zealous, even naive faith in the market," Stiglitz told Reuters in an interview.
"We had a chance to try to shape globalization, to shape the new economic order, on a new set of principles. Instead, we wound up trying to shape it reflecting our commercial and financial interests."
Worse yet, the United States exported a harsher, more extreme version of its policy mistakes to developing countries, with disastrous consequences, said Stiglitz, who was chairman of Clinton's Council of Economic Advisers from 1995 to 1997.
"We in the Clinton administration did not have a vision of a new post-Cold War international order, but the business community did. They saw new opportunities for profits," he writes in the book.
PEACE CORPS VS WALL STREET
For the 60-year-old Stiglitz, the question of which philosophy should underpin the global economy goes way beyond the theoretical tug-of-war between unfettered markets and government regulation.
"The battle is deeper than that. It has to do with what kind of society we want to live in," Stiglitz said. "Twenty years ago, my best students went into the Peace Corps. In the '90s they all went into Wall Street."
As tough as the new book may appear on Clinton and his economic advisers, President Bush's tax cuts and defense-heavy fiscal profligacy were not exactly the sort of deficit spending Stiglitz had in mind.
"I grade on a curve and while I'm harsh on Clinton, he deserves an A-plus compared with what came after," he said.
Stiglitz said Federal Reserve officials, rather than curb the dangerous excesses that characterized the happy-go-lucky '90s, were too caught up in its glory to step in at the right time to restrain markets.
Alan Greenspan's "irrational exuberance" speech in 1996, when he famously warned that stock prices might be rising too fast, was in fact an unwitting testament to the Fed chief's inflated vision of his own powers, Stiglitz wrote: "It seemed he had hoped to tame the bubble -- and save the nation from a bubble-bursting -- by words alone. Greenspan had overestimated his influence."
The coup de grace for the roaring 1990s was big-time investors' ability to bring the average Joe into the fold.
Middle-class and poor Americans were told that they too could get a piece of the New Economy pie, if only they were willing to risk it all -- including their retirement savings and pensions -- in the stock market.
The result was a multi-trillion dollar crash from which the economy has yet to fully recover.
As an antidote to free-market exuberance, Stiglitz closes by outlining what he calls a "New Democratic Idealism," which he defends as a humanist alternative to the zealotry of economic purists.
His proposal foresees a continued reliance on markets but also an active government role in health, education and job creation. "There is an alternative vision, one based on global social justice, and a balanced role for the government and the market," Stiglitz writes. "It is for that vision that we should be striving."
Goes with your financial thread.
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Where does all that money go?
If we are so foolish as to 'forgive' this debt then I say we NEVER lend (or give) any more money to any country that had its debt 'forgiven'. Nobody lends money to someone who stiffed them the last time around.
Clinton gets that and Reagan's recovery is called "The Decade of Greed".
How soon people forget 9-11. It would be interesting to see this socialist economist calculate the dollar effect of 9-11 on our economy.
Sounds as though Stiglitz overestimates his own influence too. A great question to ask clintonphiliacs, who profess the excellence of clinton and claque is, "what is it exactly that clinton did, every day to run the economy so well?"
How can it all be Reagan's fault if Stiglitz was the Guru for the 8 Clinton years and even ran the World Bank. Yet he trys to pin today's problems on a popular Repbublican president that was elected twentythree years ago. Unbelievable. What an a$$.
He had 8 years to fix things under Clintoon/Bore. Did nothing. Now he's whining that it's all Reagan's fault.
What the hell is he talking about? That's either Facism or Socialism, or more likely a mixture, reminicent of Hitler!!! (or Hitlery!!!)
Governments role is to either lead, follow or get the hell out of the way while providing infrastructure!!! I prefer the latter!!!
klinton motto:
a b.j.(lewinsky), a day, keeps "inflation away..."
"Clinton gets that and Reagan's recovery is called "The Decade of Greed"."
I thought is was more of a repeat of "The Gay Nineties," with a twist!!!
Maybe Peace Corps parents advised their children that creating individual wealth was a far more satisfying and benevolently effective career choice as opposed to administering idealistic, ineffective, wasteful international government welfare programs?
There is one thing I am 100% sure: Bill Clinton read Greenspan's FBI file. And I would not be surprised to learn that he demanded in very informal term no bubble-bursting until he leaves the office.
My wife and friends will laugh at this "Roaring Nineties" statement. I started calling the 1990's "the Roaring Nineties" about 1993. My reasoning was not necessarily economic, but due other factors, such as the loosening of morals, prohibition, etc., that were similar to the "Roaring Twenties".
"There is an alternative vision, one based on global social justice, and a balanced role for the government and the market," Stiglitz writes. "It is for that vision that we should be striving."
"We in the Clinton administration did not have a vision of a new post-Cold War international order, but the business community did. They saw new opportunities for profits," he writes in the book.
It's very difficult to take an economist seriously, if he dismisses the role of "commercial and financial interests" and the value of "profits".
What in heaven's name is an "economic order" that does not take commercial and financial interests into account and respect profits?
Stiglitz seems to think that economies are solely the creation of government policies.
I started calling the 1990's "the Roaring Nineties" about 1993. My reasoning was not necessarily economic, but due other factors, such as the loosening of morals, prohibition, etc., that were similar to the "Roaring Twenties".
Ain't that the truth. The world according to the DNC propaganda machine.
Key author of the "free" trade policies admits his mistake. Do not miss it. Read his Globalism's Discontents
"doomed the very recovery they had tried to engender by equating the interests of Wall Street with those of the nation at large. "
Bush tax policies and lower dollar have helped investors place their bets in Wall Street. But when do the jobs trickle down [rationale for the cuts]?
There may be still time for a 3 million strong finishing kick but the slog time keeps getting shorter.
Middle-class and poor Americans were told that they too could get a piece of the New Economy pie, if only they were willing to risk it all -- including their retirement savings and pensions -- in the stock market.
The result was a multi-trillion dollar crash from which the economy has yet to fully recover.
Wait! I thought this guy gave Clinton high marks compared to Bush. Wasn't it Clinton who daily extolled, or even invented, the phrase "new economy". Wasn't it Clinton who declared the "end of the boom-bust cycle" and thus inflated the bubble before the crash?
Socialism, globalism, interventionism are unproductive in their own right but require more nonproductive investment in the future. We are on a merry-go-round that is spinning so fast that we cannot get off without serious injury. The game of musical chairs might go on until Bush's reelection, but pull your hat down immediately afterward. Bush and Greenspan have no clue on how to pull the country out of the debt manipulation that they have caused.
| Liberal Professor Gets Own News Article
"He's basically praising Clinton with faint damn," said one anonymous source. "The 'third way' is just so last millenium," said another. "Even Tony Blair craps on it now." The professor collected 322 liberal talking points and crammed them into a single article, which Reuters tried to pass off as news. |
One thing for sure: X42 and Stiglitz made a horrendous error by allowing capital to act without fetters.
It would be a lot of fun were some American President to declare that "the interests of multinationals no longer having the majority of their operations in the USA will no longer be protected by American military or civil authorities.
One other thing: does Stiglitz forget that the Fed Reserve has quite a bit of power over margin accounts??? Greenspan could easily have kneecapped the stock bubble with a few new lines in the regulations.
Into the pockets of pock-marked faced thugs wearing cheesy little uniforms and reflecting sunglasses.
The Truth. Raise the qualification requirements across the board and presto: solid collateral, no gambling.
They also create the expanding money supply needed to keep the economy (artificially) expanding and provide some hope for a job filled economic recovery some day. Maybe. Hopefully.
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For the third time in as many minutes, a liberal professor's highly predictable rant has made it onto the wire at Reuters disguised as a news story.