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.

Catching up with full-time defendant Cristina Kirchner

Cristina Fernández de Kirchner

Here at Useful Stooges we’ve spent a lot of time covering the misadventures of former Argentinian president Cristina Fernández de Kirchner.

We’ve examined economist Joseph Stiglitz’s intimate (and profitable) relationship with the Kirchner clan. We’ve pondered hedge funder Kyle Bass’s foolish championing of Cristina’s disastrous economic polities. Then there’s Wall Street hotshot Georges Ugeux, who blamed Argentina’s fiscal problems not on Kirchner corruption but on the country’s sovereign-debt creditors. And economist Mark Weisbrot, who looked at an Argentina headed for financial disaster and proclaimed that it was doing “remarkably well.”

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Jose Fernando Lopez

We met Kirchner crony José Francisco López, who was turned in to the cops by a bunch of nuns who caught him trying to throw plastic bags stuffed with crookedly acquired cash over their convent wall.

On December 17, 2015, we congratulated Argentina on electing as its new president the candidate who was not Cristina’s chosen successor. And on December 31, 2016, we celebrated New Year’s Eve by noting that a federal judge, Julian Ercolini, had ordered Cristina put on trial for corruption, along with her former Planning Minister, Julio de Vido, and her former state secretary for public buildings, the above-named José Francisco López.

Judge Claudio Bonadino

That was the last time we checked in with Cristina. Since then, the former President has been a full-time professional defendant. On March 23 of this year, another judge, Claudio Bonadino, also ordered her to stand trial, this time for instructing her country’s central bank “to sell dollar futures at artificially low prices, causing Argentina to lose hundreds of millions. Also indicted was her former Economy Minister, Axel Kicillof. In April she racked up her fourth criminal charge, this one for engaging in real-estate transactions for the purpose of money laundering. On that occasion her passport was confiscated, and her two children, Florencia and Maximo, were also indicted.

Amado Boudou

In June, in a desperate effort to acquire immunity from prosecution, she filed to run for Senate as the candidate of a new party she had founded just for that purpose. In the August elections, despite her massive corruption record, she actually won. At an October inquiry, Cristina “defended a secret pact negotiated by her government with the Iranian regime in 2011. And in November, her former VP, Amado Boudou, was arrested on charges of embezzlement and illicit association.

Now, despite her senatorial immunity, it may soon be Cristina’s turn to sample prison food. On December 7, Judge Bonadino asked the Senate to waive her immunity and allow her to be arrested and tried on charges of treason. The specific crime: covering up Iran’s role in the fatal 1994 bombing of a Jewish center in Buenos Aires. We’ll see what happens. Non-fans of the Kirchner clan may again have reason to celebrate on New Year’s Eve.

Stiglitz’s Gallic delusion

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Channeling Chaplin? (see photo below)

He’s been called “a ‘superstar’ of the Left” who “defaults to leftist ideologies at every turn,” who “offers an old-Keynesian approach to new problems,” who “has assumed the role of social-democratic public-intellectual-in-chief,” who “increasingly labels anyone disagreeing with him as a ‘market fundamentalist’ or a ‘conservative journalist,’” and who’s “essentially an economic crank.”

Charlie-Chaplin-The-Great-Dictator_thumbWe’re talking about Columbia University economist Joseph Stiglitz, who, as we’ve seen in the last few days, is a fierce critic of the free market, of “American-style capitalism,” and of “economic inequality,” and a zealous enthusiast for welfare states, for an international currency and international tax system, and for the financially irresponsible governments of Greece and Argentina (for both of which, it turns out, he’s been a paid “advisor”).

The absurdity of Stiglitz’s economic views is crystallized in his relatively recent comments on France. As financial analyst Pater Tenebrarum noted a year ago, Stiglitz has been an outspoken fan of France’s profligate government spending – because, in Stiglitz’s view, lowering state spending is the path to economic disaster. Yet as Tenebrarum pointed out, France’s neighbor to the south, Spain, had “been outperforming France for the past several quarters.”

Why? Because, unlike France, Spain cut government spending, reformed its labor laws, and “ma[de] life easier for businesses” in a number of other respects. In short, as Tenebrarum put it, “Spain has done precisely what Mr. Stiglitz believes is leading to failure, while France has done precisely what he believes to guarantee success.” Commenting on Stiglitz’s statements about the French economy – including the claim that France is business-friendly – Tenebrarum could not disguise his incredulity:

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At a 2010 Italian Trade Commission event in New York

He believes that a government that is spending a record 58% of GDP every year – more than any other government in the allegedly capitalist countries – and that is well-known for having instituted the highest tax rates in Europe and having put in place the most onerous business regulations imaginable, is a paragon of “pro business austerity”!

To say that this is utterly ridiculous is the understatement of the century. How can one make such an assertion and keep a straight face? Hundreds of thousands of young entrepreneurs have fled France for more business-friendly places such as the UK, because they simply felt they could not operate in France’s extremely hostile business climate….

Is Mr. Stiglitz unaware of the fact that France has introduced a 75% marginal tax rate for high income earners, which is in fact the highest in the world? Stiglitz should in fact explain to us why the sure-fire “success” of this policy in France is so conspicuous by its absence (since he asserts above that raising taxes on the rich will “boost the economy”!). 

While acknowledging that one can have an opinion on business matters without ever having run a business, Tenebrarum added that “anyone who has struggled with establishing a small business in hostile bastions of socialism in the EU such as France” would be stunned by Stiglitz’s statement that “the level of corporate taxation has little effect on investment.” Tenebrarum’s own take on this claim:

Detail of the facade of the Bank of France headquarters in Paris May 9, 2012. REUTERS/Charles Platiau

This is spoken like a life-long leftist academic and bureaucrat who has never created one iota of real wealth in his life, who has never taken any personal risk or ever had to worry about paying someone else’s wages. Anyone who has ever taken the risks about which Mr. Stiglitz evidently knows nothing will confirm how utterly misinformed this comment is. In Europe, the entrepreneurial spirit has been completely crushed in many places due to extremely high taxation and massive over-regulation. And yet, how does Stiglitz believe new wealth is going to be produced? It’s not going to drop from the sky, that much is certain.

And that, in the end, is perhaps the most important thing that needs to be said about the economic preferences, proposals, pretenses, and prognostications of Columbia University’s own Professor Stiglitz.

Joe Stiglitz, Kirchner compañero

Yesterday, as part of our portrait of powerful, anti-capitalist economist Joe Stiglitz, we took a look at his outspoken support for Greece in its current budget crisis – and his close friendship with Greek leaders, who’ve paid him scads of (other people’s) money either for his advice or (could it be?) for his public advocacy on their behalf.

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Joseph Stiglitz

Then there’s Argentina. Stiglitz’s relationship with the corrupt Kirchner regime goes back a long way. He was a paid advisor to the late President Néstor Kirchner, who was in office from 2003 to 2007, and has played the same role for Kirchner’s wife and successor, Cristina Fernández de Kirchner. He’s traveled frequently to Buenos Aires to advise the Kirchners and been paid handsome sums to deliver lectures there. Argentina defaulted on its sovereign debt in 2001, and Stiglitz took its side, filing an amicus curiae brief when Argentina appealed a U.S. court ruling ordering it to pay creditors $1.3 billion.

In 2012, he served as a paid consultant for the Kirchner regime in a case before the World Bank’s International Centre for Settlement of Investment Disputes. In the same year, he held a speech at the Casa Rosada in which he bashed the free market and praised Cristina Kirchner, head of a grotesquely kleptocratic government, for the wisdom of her economic policies; Cristina, for her part, sat there applauding Stiglitz.

It’s worth asking: is Stiglitz being paid by the Kirchners for his advice – or for allowing them to use his name and reputation to whitewash their inept and criminal economic activities?

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Thomas P. Griesa

Then, last year, after being ordered by New York judge Thomas P. Griesa to pay off not just some but all of its creditors, Argentina defaulted again. It was the country’s second default in 13 years. Stiglitz again stood up for Argentina, publicly giving Cristina Kirchner a thumbs-up and calling for – what else? – “an international convention for sovereign debt restructuring to resolve these issues.”

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With Cristina Kirchner

In an August 2014 article written with Martin Guzman, Stiglitz ardently defended Cristina Kirchner – who, in collusion with her rapacious army of cronies, comrades, and confidantes, has stolen her nation blind – and instead viciously slammed everyone else in the picture. He slammed Griesa, whose only offense was to make a ruling that strictly adhered to the law. (Stiglitz and Guzman even promoted a Twitter hashtag, “#Griesafault,” as a way of deflecting responsibility for Argentina’s economic chaos from the crooked Kircherites to the U.S. judge.)

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On October 9 with Argentinian economics minister Axel Kicillof, who tweeted: “Gran diálogo con @JosephEStiglitz sobre los procesos de reestructuración de deuda y lucha contra los fondos buitres.”

He also slammed Argentina’s holdout creditors, whom, directly echoing Kirchner’s own rhetoric, he smeared as “vultures,” their only crime being that they expected to be paid in full for the debts they were owed. “Repayment on Griesa’s terms,” pronounced Stiglitz, “would devastate Argentina’s economy.” No, what has devastated Argentina’s economy has been years of governance by the unscrupulous, thieving Kirchner regime – including economy minister Axel Kicillof, who on October 9 tweeted a picture of himself and Stiglitz, writing: “Great dialogue with @JosephEStiglitz about the debt-restructuring process and the fight against the vulture funds.”

As with Greece, then, how can Stiglitz expect anyone to take his pronouncements on Argentina seriously?

We’re not done yet. Tune in again on Monday.

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.

 

Joe Stiglitz’s war on inequality

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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, who, among much else, is a fierce critic of American-style capitalism, an ardent fan of the U.N., a proponent of an international tax system (!), and a “point man” for George Soros, the gazillionaire bag man for the American far left. 

One of Stiglitz’s fixations, as we’ve mentioned, is income inequality. He sees it as the root of virtually all economic problems. Last April, Mark Hendrickson did a good job of putting Stiglitz in his place when it comes to this topic. Writing in Forbes, Hendrickson pointed out that Stiglitz is so down on income equality that “he looks more favorably upon the Great Depression, with its greater poverty but lower measures of inequality, than the 1980s, with its significant improvements in standards of living for the non-rich accompanied by higher measures of inequality.”

We’re reminded of Margaret Thatcher’s famous November 1990 retort in the House of Commons to a Liberal Democrat MP who complained about the rise in income inequality during her years as prime minister: “What the honorable member is saying is that he would rather that the poor were poorer, provided that the rich were less rich….So long as the gap is smaller, they would rather have the poor poorer. You do not create wealth and opportunity that way. You do not create a property-owning democracy that way.”

Stiglitz’s preoccupation with income inequality leads to some bizarre pronouncements. For instance, he attributes post-World War II prosperity to that era’s highly progressive tax code; Hendrickson replies, quite sensibly, that “I know of no accepted economic theory that high taxes create prosperity,” and ascribes postwar prosperity, more logically, to the “huge decline in federal spending after the war” that sparked “a flood of pent-up demand.” Similarly, while Stiglitz blames today’s greater economic inequality on the less progressive tax codes that were introduced during the Reagan era, Hendrickson retorts that “there is a much more obvious cause” for this inequality, namely government growth. Hendrickson sums up his differences with Stiglitz as follows:

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Mark Hendrickson

Joseph Stiglitz’s diagnosis is flat-out wrong when he argues that the middle class is declining because the rich are getting richer. That zero-sum view is atavistic mercantilist nonsense….for him to blame the rich instead of government for today’s problems reflects a partisan and ideological bias rather than objective economic analysis.

Indeed. In the next couple of days, we’ll take a closer look at Stiglitz’s partisan and ideological biases. Hold on to your hats.

Joe Stiglitz, Soros “point man”

Yesterday we started looking at Joseph Stiglitz, the massively influential Columbia University economist who derides “American-style capitalism” while preaching government intervention as the key to prosperity. We ended up by stating that while Stiglitz has been called a liberal, it really makes more sense to call him a socialist. Why?

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The Socialist International Commission on Global Financial Issues. Stiglitz can be seen along the right side of the table, leaning forward, between the windows

Well, to begin with, quite simply, he’s a card-carrying member of the Socialist International. In 2008, he chaired a Socialist International commission charged with “tackling the global financial crisis.” The commission’s other members included not just socialists but out-and-out Communists from around the world.

UNStiglitz is also a fervent enthusiast for the UN, a supporter for a dramatic increase in its power, and an advocate for the view that the U.S. and other sovereign states should be subordinated to that power. He’s one of those people who believe, perversely, that when you scrape together the (at best) dicey representatives of a hundred or so corrupt, poor, unfree, incompetently managed nations and pack them into a building on First Avenue in Manhattan, they magically turn into a body of wise, noble, upright sages who are equipt to restructure the world order – and reorder the world economy. Among the UN officials with whom Stiglitz has closely collaborated is Miguel D’Escoto, a hard-line Marxist who was foreign minister for the Communist Sandinista regime in Nicaragua, who won the USSR’s Lenin Peace Prize, who’s an outspoken enemy of both the U.S. and Israel, who has publicly hugged Iranian President Mahmoud Ahmadinejad – and who, a few years back, appointed Stiglitz “to chair a high-level U.N. task force to review the global financial system.”

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Miguel D’Escoto

As great as Stiglitz’s enthusiasm for the UN is his contempt for the International Monetary Fund. In his 2002 book Globalization and Its Discontents, according to Irwin M. Stelzer, Stiglitz “almost equates the consequences of policy failures by the International Monetary Fund with the consequences of Nazi Germany’s final solution.” What, in Stiglitz’s view, needs to be done to fix the IMF? Easy: give more power to the African countries that are the chief beneficiaries of its largesse. As Stelzer put it, “in a perfect world it would be sensible to confer more power on the recipients of IMF assistance so that the funds might be deployed more effectively. But we don’t live in that world. Ours is one in which kleptocratic African regimes impoverish their nations with a combination of misrule, military adventures, and policies that discourage inward investment.”

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George Soros

Then there’s Stiglitz’s connection to George Soros, the far-left multibillionaire who is actively seeking to use his wealth to transform the world – and, not least, as we’ve seen in previous posts on this site, diminish American power and American freedom. Soros, as Cliff Kincaid has observed, “wants to phase out the U.S. dollar as the international reserve currency and bring the U.S. into a system of international socialism, with new and more powerful global agencies deciding our economic and financial fate.” And who is Soros’s “point man” on this alarming project? None other than Joe Stiglitz – who, as head of a Soros-funded NGO called the Initiative for Policy Dialogue, is fighting for the institution of “a new international currency” and of an international taxation system.

Yes, you read that right: an international taxation system.

More tomorrow.

Joe Stiglitz, big-government guru

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.

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Joseph Stiglitz

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.”

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Stiglitz in Australia earlier this year

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.

DAVOS-KLOSTERS/SWITZERLAND, 31JAN09 - Joseph E. Stiglitz, Professor, Columbia University, USA, at the Annual Meeting 2009 of the World Economic Forum in Davos, Switzerland, January 31, 2009. Copyright by World Economic Forum swiss-image.ch
Stiglitz at Davos, 2009

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.