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.

Stiglitz’s latest slimy gig

The other day we delved into a recent New York Times op-ed that sought to whitewash the massively corrupt Kirchner kleptocracy in Argentina, to demonize its creditors, and to defend its indefensible economic policies. The author of the op-ed was none other than the chief architect of those policies, and one of the Kirchners’ more prominent foreign courtiers and sycophants – economist Joseph E. Stiglitz.

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Joseph E. Stiglitz

This wasn’t Stiglitz’s first appearance here at Useful Stooges. In several articles last October, we pondered his perverse enthusiasm for command economies, his championing of a socialist U.N. superstate, and other perverse positions that make one wonder just how this character ever managed to score the Nobel Memorial Prize in Economic Sciences.

We were still shaking our heads over Stiglitz’s Times op-ed when his name again made a prominent appearance in the press. On April 13, the Guardian mentioned Stiglitz in connection with the internationally notorious Panama Papers case.

20131029 Islands statsminister Sigmundur Davíð Gunnlaugsson vid Nordiska rådets session i Oslo. Foto: Magnus Fröderberg/norden.org
Sigmundur Davíð Gunnlaugsson

You’ve heard of the Panama Papers, of course? They’re a trove of some 11.5 million documents that, leaked last year to the Süddeutsche Zeitung and first reported on earlier this month, have caused worldwide scandal. They describe in detail the use of various shell companies by powerful figures (including UAE president Khalifa bin Zayed Al Nahyan, Ukrainian president Petro Poroshenko, Saudi King Salman, and Icelandic premier Sigmundur Davíð Gunnlaugsson) for nefarious purposes ranging from fraud to tax evasion. The Guardian article outlined plans by the so-called JITSIC network – a task force of 31 major Western nations, plus China, Japan, South Korea, and South Africa – to take aggressive action against these activities.

UAE president, Sheikh Khalifa bin Zayed al-Nahayan, attends the final session of the Gulf Cooperation Council (GCC) summit in Kuwait City on December 15, 2009. Energy-rich states of the Gulf do not feel threatened by Iraq's plans to massively expand its oil production, Kuwait's foreign minister said. The GCC alliance is made up of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates. AFP PHOTO/YASSER AL-ZAYYAT (Photo credit should read YASSER AL-ZAYYAT/AFP/Getty Images)
Sheikh Khalifa bin Zayed al-Nahayan

How does Stiglitz figure in all this? Well, it turns out that while those responsible-minded JITSIC countries were criticizing Panama’s longtime willingness to host shady shell companies and cover up their crooked activities, Panama was handing Stiglitz a new gig. As the Guardian put it, “The Panama government announced that Joseph Stiglitz…would be one member of an international panel formed to review Panama’s legal and financial practices and recommend improvements.”

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King Salman

To us, this sounds like an exceedingly fishy development. First of all, Panama doesn’t need a Nobel Prize-winning economist to tell it to clean up its act; if it wants to be regarded as a transparent financial actor, what it has to do is pretty obvious. Second, given Stiglitz’s track record as an apologist for corrupt regimes, he’s highly unlikely to recommend that Panama institute any meaningful reforms.

What’s going on here, then? Most likely, Stiglitz is providing air cover – lending his name to Panama in its effort to whitewash its reputation as a cash hideout. Is he being paid for this? That’s one question the JITSIC countries might want an answer to – although even if he’s not collecting a fee this time around, his readiness to play ball with the creeps who run Panama deserves scrutiny. For this guy is looking more and more like an ambulance-chaser for unsavory governments.

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Petro Poroshenko

Why does any of this matter? Well, one reason it matters is that places like the New York Times still take Stiglitz seriously as a wise, objective commentator on economic affairs. Another reason is that he’s on the faculty of Columbia University, which expects from its professors a high level of transparency – including full reporting to the college administration of any possible “financial conflicts of interest in research.” But although Stiglitz’s résumé repeatedly cries out “conflict of interest,” he hasn’t reported any such conflicts.

George-Papandreou
George Papandreou

Just look at some of the folks he’s been in deep with over the years. In 2009, the generals who rule Myanmar took him on as a “consultant.” How much was he paid? What was the relationship between his work for the generals and his glowing public statements on Myanmar’s economy?

Stiglitz also “counseled” former Greek Prime Minister George Papandreou. Again, what was his fee? Were his positive comments about Greece’s financial health compromised by these arrangements? In 2013 he invited Panandreou to speak at the Columbia World Leaders Forum – but, in violation of the university’s guidelines, he didn’t disclose their financial connection.

Was the invitation some kind of quid pro quo?

DAVOS/SWITZERLAND, 26JAN12 - Meles Zenawi, Prime Minister of Ethiopia speaks during the session 'Africa -- From Transition to Transformationy' at the Annual Meeting 2012 of the World Economic Forum at the congress centre in Davos, Switzerland, January 26, 2012. Copyright by World Economic Forum swiss-image.ch/Photo by Monika Flueckiger
Meles Zenawi

The same question arises in the case of the late Ethiopian Prime Minister Meles Zenawi, whom Stiglitz viewed as a close friend, whose economic policies he praised, and whom he invited to speak at the 2010 Columbia World Leaders Forum. That invitation brought fierce criticism on the website of the Columbia Spectator, where scores of Ethiopians charged the university with legitimizing a “tyrant” who was guilty of “genocide, ethnic cleansing…and other…atrocities.” Jagdish Baghwati, an Ethiopian economist at Columbia, condemned the invitation as the act of academic “entrepreneurs” who were using the college to “ingratiate” themselves with criminal regimes “to get PR and ‘goodies’ for themselves at African summits.” And in a letter to the university’s president, Ethiopian journalist Serkalem Fasil described how she was imprisoned for doing her job, gave birth prematurely as a result of abuse there, and, in the ultimate example of “incomprehensible vindictiveness,” was denied by Zenawi the incubator doctors said her baby needed.

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Renmin University

And what about China? Stiglitz has some kind of relationship with the Renmin University of China Institute of Economic Research – which, of course, amounts to having a relationship with the Chinese state. Again, he hasn’t made public any information about income he’s earned from this gig. What he has made public is his supposed enthusiasm for an alternative to the single reserve currency – a position neatly in line with Beijing’s – and his claim that concerns about risks to the Chinese economy are overblown.

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Evo Morales

Then there’s Bolivia, where in a single day Stiglitz received two honorary doctorates. After meeting in 2006 with Evo Morales, that country’s socialist strongman (and longtime Castro chum), Stiglitz began speaking out in favor of Morales’s nationalization of private property. What happened at that meeting? Did money change hands? Or did Evo – who’s not exactly famous for his eloquence – dazzle Stiglitz with the brilliance of his argument for expropriation?

Are you beginning to discern a pattern here?

The President of Paraguay Fernando Lugo speaks during a press conference to announce he will comply with the Paraguayan justice on the paternity case, on April 20, 2009 in Asuncion. Earlier today, Benigna Leguizamon, 27, gave Lugo a one-day period to acknowledge the paternity of Lucas Fernando Leguizamon, an alleged son of his, otherwise she would start a lawsuit. AFP PHOTO/Norberto Duarte (Photo credit should read NORBERTO DUARTE/AFP/Getty Images)
Fernando Lugo

These aren’t the only leaders who’ve availed themselves of Stiglitz’s “services.” Others include Fernando Lugo, former president of Paraguay, and José Luis Rodríguez Zapatero, former prime minister of Spain. Stiglitz has been a “financial consultant” to the Icelandic government and has given “expert testimony” on Ireland’s sovereign wealth fund.

What did he pocket? Who knows? In none of these cases has Stiglitz disclosed how much he’s been paid for his work – or, for that matter, exactly what his “work” has consisted of. How much of his “consulting” for heads of state and government has involved actual consulting – and how much of it has amounted to nothing more than an agreement to publicly promote their horrible economic policies? In other words, is he simply raking in cash from leftist governments in exchange for positive PR – like a crooked film critic selling a movie producer a rave?

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José Luis Rodríguez Zapatero

Stiglitz hasn’t only done deals with governments. He’s delivered speeches under the auspices of a long list of Funds and Centers, Institutes and Coalitions, Foundations and Iniatitives, Councils and Commissions. How much did they pay? Again, mum’s the word. (Even Hillary Clinton makes public her lecture fees.) But more to the point: what were they really paying for? Did Stiglitz give these institutions tough, smart advice that they perhaps didn’t want to hear – or, as with his governmental clients, did he affirm their own wisdom to their faces and then come away touting it to the world?

To be sure, if Stiglitz is monetizing his Nobel, he wouldn’t be the first to do so. But there can’t be too many other Nobelists who’ve been so aggressive about it. Put it this way: if they awarded a Nobel Prize for using your reputation as a serious economist to help prop up unscrupulous autocrats, he’d have no competition.

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.