Looking at his résumé, you’d almost think he could part the Red Sea. He was a Fulbright Scholar at Cambridge; he’s taught at Yale, Stanford, Oxford, Princeton, and Columbia; he chaired President Clinton’s Council of Economic Advisors; he was chief economist at the World Bank; and he won the Nobel Memorial Prize in Economic Sciences.
He’s served as an economic advisor to the UN and other international organizations as well as to heads of government around the world. In 2011, Time Magazine named him one of the world’s 100 most influential people.
But exactly what kind of influence does Joseph Stiglitz wield? What kind of advice does he dispense?
The first thing that’s important to know is that he’s a dyed-in-the-wool Keynesian. Meaning what? Meaning, for one thing, that he’s a guy who blamed the 2008 world financial crisis on U.S. economic deregulation – never mind that, as Samuel Gregg wrote in 2010, Western Europe’s hyper-regulated economies were at that point “in even worse shape than America’s” and Greece, “one of the most regulated and interventionist economies in the entire EU,” was “on financial life support.”
He’s a guy who argued that the solution to the 2008 world financial crisis – the way to create jobs and increase employment – was to increase direct government spending, even though, as Matthew Continetti warned in the Weekly Standard, such spending would inevitably “create even larger deficits and add to an already high national debt.”
He’s a guy who summed up the financial crisis in 2009 by saying that one of its “big losers” was “support for American-style capitalism” and that this loss of support had “consequences we’ll be living with for a long time to come.” Two words: wishful thinking. Stiglitz (as we’ll see) would like nothing better than to see support for “American-style capitalism” disappear entirely.
He’s a guy who’s tirelessly tried to sell the argument that inequality of income and wealth lies at the root of virtually all economic problems – even though, as Patrick Brennan noted in National Review in 2012, there’s “almost no evidence that economic inequality causes financial crises.”
He’s a guy who has praised as a “miracle” the modest economic success of the big-government island nation of Mauritius while ignoring, as Reihan Salam pointed out in 2011, the truly spectacular performance of a country like Singapore, whose hands-off approach to the private sector is utterly at odds with Stiglitz’s prescriptions.
Gregg calls him “an old-line modern liberal,” charging that his response to the 2008 crisis was “worthy of FDR or LBJ.” In fact, the word socialist suits Stiglitz far better than liberal.
Why? We’ll start answering that question tomorrow.