More idiocy from Joe Stiglitz

How do you destroy a country’s economy? Well, here are a few ideas. Hike taxes. Overregulate. Ratchet up government spending. Increase welfare entitlements. Make it your goal not to achieve greater prosperity for everyone but to achieve greater income and wealth equality.

Joseph Stiglitz

This, after all, is how the chavistas ran Venezuela, once one of the world’s most prosperous nations, into the ground. And, believe it or not, these are the prescriptions offered by economist Joseph Stiglitz, whom we profiled here at some length in October 2015 and whom we’re revisiting now because of a characteristically wacky article by him that appeared in the Guardian on May 30.

But first, a reminder: this, as we noted four years ago, is a man who has taught at Yale, Oxford, Stanford, Princeton, and Columbia; who served as chief economist at the World Bank; who was a top advisor to the United Nations; who was named one of the world’s 100 most influential people by Time magazine; and who, yes, won the Nobel Memorial Prize in Economic Sciences in 2001.

Paul Krugman

How, you may ask, did a man with such cockeyed economic ideas win a Nobel Memorial Prize in Economics? Well, remember, Paul Krugman won one too. And Yasir Arafat won the Nobel Peace Prize. Not every decision they make in Stockholm or Oslo is a brilliant one.

If you think it’s unfair to compare the economic philosophy of a Nobel laureate with the cockeyed socialist ideas that ruined Venezuela, consider this: Stiglitz is a socialist – an actual member of the Socialist International who, in 2008, headed up a Socialist International commission charged with figuring out a solution to the global financial crisis. He’s an enemy of the nation-state and particularly of American-style democratic capitalism, and would replace the current world order with a socialist global government, complete with a new global currency and a global income tax.

Georg Papandreou

But while we still have nation-states, Stiglitz isn’t above profiting from some of the more poorly run ones in ways that call into question his professional integrity. For example, he weighed in repeatedly in places like Time magazine on the Greek financial crisis, which he blamed entirely on Germany, not on Greece; what he failed to mention was he was a paid advisor to Greek prime minister George Papandreou. In 2014, when New York judge Thomas P. Griesa ordered Argentina to pay its creditors, Stiglitz badmouthed the judge, called the creditors “vultures,” pronounced that “America is throwing a bomb into the global economic system,” and passionately defended Argentinian president Cristina Kirchner; again, he omitted to inform his readers that he had long been on the Kirchner payroll, supposedly serving as an economic advisor, although to many observers it certainly looked as if he was selling his name and reputation to whitewash a kleptocracy.

Cristina Kirchner

Which brings us to Stiglitz’s recent piece for the Guardian. There’s not really anything new in it; what’s remarkable is the timing. Here’s the headline: “Neoliberalism must be pronounced dead and buried. Where next?” And here’s the subhead: “For decades the US and others have pursued a free-market agenda which has failed spectacularly.” An incredible thing to say at a time when the American economy is stronger than it has been in decades and is the world’s most competitive, with record employment and income levels for pretty much every population group and every category of job.

Donald J. Trump

Many people credit President Trump for this extraordinary boom. Not Stiglitz. He not only pretends that the boom isn’t happening; he smears Trump as an avatar of “far-right nationalism,” which to him is even worse than plain old neoliberalism or the “centre-left reformism” of Tony Blair and Bill Clinton. In Stiglitz’s view, all three of these approaches should be junked in favor of a “radically different economic agenda” that he calls “progressive capitalism,” under which free markets would be a thing of the past and state-run economies would be the order of the day.

Stiglitz’s picture of what “progressive capitalism” would look like and how it would work is heavy on abstractions and light on specifics. “Governments have a duty to limit and shape markets…. government [should take] a more active role than neoliberalism prescribes.” Yet by the end of the article it’s clear what he‘s calling for. To be sure, he’s careful not to use the word Communism or even socialism, but those are the generally accepted names for what he prefers to call “progressive capitalism.”

Again, how weird to encounter a brief for socialism at a time when the chavistas’ Venezuela is dying and Trump’s America is thriving! But that’s old Joe for you.

Joseph Stiglitz: Greeks bearing gifts

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Joseph Stiglitz

During the last couple of days, we’ve been pondering the career and views of big-government economist Joseph Stiglitz. We started out on Monday by mentioning Stiglitz’s glittering résumé. Here’s a little P.S. about that résumé: writing last year in National Review, Eliana Johnson noted that while it ran (at that point) to 56 pages, it omitted a good deal of Stiglitz’s speaking and consulting activity – even though, at $40,000 per lecture, he earned most of his income from that activity. These omissions, noted Johnson, were in direct violation of the transparency rules in effect at the Columbia Business School, where Stiglitz teaches. They also hid what any sensible observer would recognize as clear conflicts of interest. 

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Angela Merkel

What kinds of omissions – and conflicts of interest – are we talking about here? Well, one of them involves Greece. Over the course of the Greek financial crisis, Stiglitz has weighed in repeatedly on the subject – consistently on the side of the Greek government. While other economists argue that Greece brought on its own economic woes by spending far more money on generous welfare benefits and the like than it could afford, confident that Germany and other rich EU members would keep making up the shortfall, Stiglitz has depicted Greece as an innocent victim and its EU partners (which eventually got sick of picking up the tab) as heartless heavies.

Germany, he charged in July 2015 at an international development financing summit in Addis Ababa, lacked “solidarity” with Greece. “Asking even more from Greece would be unconscionable,” he said. In response to Western leaders who criticized Greece for failing to collect taxes, he accused those same leaders of being hypocrites for “trying to undermine” his own efforts to institute an international tax system.

The same month, in an article for Time, Stiglitz even went so far as to compare Angela Merkel’s Germany to Hitler’s:

The U.S. was generous with Germany as we defeated it. Now, it is time for the U.S. to be generous with our friends in Greece in their time of need, as they have been crushed for the second time in a century by Germany….Greece needs unconditional humanitarian aid; it needs Americans to buy its products, take vacations there, and show a solidarity with Greece and a humanity that its European partners were not able to display.

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Stiglitz and Papandreou at a 2013 Columbia University forum

As if that weren’t enough, Stiglitz wrote a New York Times op-ed – also in July 2015 – casting Greece as a “sacrificial lamb” victimized by what he calls the “troika” – the International Monetary Fund, the European Central Bank and the European Commission.

What Stiglitz failed to acknowledge in these pieces – and elsewhere – is that he’s not a neutral observer of the Greek economic disaster. Far from it. From 2009 to 2011, he worked as a paid advisor to Greek prime minister George Papandreou, whom he’s described as a friend. In February 2010, while serving in that advisory position, Stiglitz actually said this about Greece: “There’s clearly no risk of default. I’m very confident about it.” Was he speaking as an honest, responsible analyst, or as a paid flunky? 

(A flunky, one might add, who was cashing checks from a government that should instead have been using that money to pay down its debts.)

More tomorrow.