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.

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.