Economist Stiglitz Rips Clinton, Wall St., Himself

Reuters ^ | 10-13-03

[Brian S]

Mon October 13, 2003 08:14 AM ET By Pedro Nicolaci da Costa

NEW YORK (Reuters) - Nobel-winning economist Joseph Stiglitz is best known for his scathing critique of globalization's effect on the world's poor, but now he has turned his ire on an unlikely new target -- himself.

Last year, Stiglitz's book "Globalization and its Discontents" took aim at the World Bank and International Monetary Fund's policies, making him something of a celebrity economist in places like Latin America.

But some in Washington complained that he accepted too little blame for how the bank's policies were shaped when he served as its chief economist.

Now the Columbia University professor's new book "The Roaring Nineties" says President Bill Clinton's economic team, in which he played a key role, doomed the very recovery they had tried to engender by equating the interests of Wall Street with those of the nation at large.

"It was an overly zealous, even naive faith in the market," Stiglitz told Reuters in an interview.

"We had a chance to try to shape globalization, to shape the new economic order, on a new set of principles. Instead, we wound up trying to shape it reflecting our commercial and financial interests."

Worse yet, the United States exported a harsher, more extreme version of its policy mistakes to developing countries, with disastrous consequences, said Stiglitz, who was chairman of Clinton's Council of Economic Advisers from 1995 to 1997.

"We in the Clinton administration did not have a vision of a new post-Cold War international order, but the business community did. They saw new opportunities for profits," he writes in the book.

PEACE CORPS VS WALL STREET

For the 60-year-old Stiglitz, the question of which philosophy should underpin the global economy goes way beyond the theoretical tug-of-war between unfettered markets and government regulation.

"The battle is deeper than that. It has to do with what kind of society we want to live in," Stiglitz said. "Twenty years ago, my best students went into the Peace Corps. In the '90s they all went into Wall Street."

As tough as the new book may appear on Clinton and his economic advisers, President Bush's tax cuts and defense-heavy fiscal profligacy were not exactly the sort of deficit spending Stiglitz had in mind.

"I grade on a curve and while I'm harsh on Clinton, he deserves an A-plus compared with what came after," he said.

Stiglitz said Federal Reserve officials, rather than curb the dangerous excesses that characterized the happy-go-lucky '90s, were too caught up in its glory to step in at the right time to restrain markets.

Alan Greenspan's "irrational exuberance" speech in 1996, when he famously warned that stock prices might be rising too fast, was in fact an unwitting testament to the Fed chief's inflated vision of his own powers, Stiglitz wrote: "It seemed he had hoped to tame the bubble -- and save the nation from a bubble-bursting -- by words alone. Greenspan had overestimated his influence."

The coup de grace for the roaring 1990s was big-time investors' ability to bring the average Joe into the fold.

Middle-class and poor Americans were told that they too could get a piece of the New Economy pie, if only they were willing to risk it all -- including their retirement savings and pensions -- in the stock market.

The result was a multi-trillion dollar crash from which the economy has yet to fully recover.

As an antidote to free-market exuberance, Stiglitz closes by outlining what he calls a "New Democratic Idealism," which he defends as a humanist alternative to the zealotry of economic purists.

His proposal foresees a continued reliance on markets but also an active government role in health, education and job creation. "There is an alternative vision, one based on global social justice, and a balanced role for the government and the market," Stiglitz writes. "It is for that vision that we should be striving."

[BOBTHENAILER]

"The Roaring Nineties" says President Bill Clinton's economic team, in which he played a key role, doomed the very recovery they had tried to engender by equating the interests of Wall Street with those of the nation at large.

Goes with your financial thread.

[Support Free Republic]

DANG FREEPERS KEPT ME FROM BECOMING THE WORLD'S GREEN KING!
	Donate Here By Secure Server Or mail checks to FreeRepublic , LLC PO BOX 9771 FRESNO, CA 93794 or you can use PayPal at Jimrob@psnw.com
STOP BY AND BUMP THE FUNDRAISER THREAD- It is in the breaking news sidebar!

[BenLurkin]

So we make the Third World poor by lending it money?

Where does all that money go?

If we are so foolish as to 'forgive' this debt then I say we NEVER lend (or give) any more money to any country that had its debt 'forgiven'. Nobody lends money to someone who stiffed them the last time around.

[Semper Paratus]

"The Roaring Nineties"

Clinton gets that and Reagan's recovery is called "The Decade of Greed".

[Paco]

The result was a multi-trillion dollar crash from which the economy has yet to fully recover.

How soon people forget 9-11. It would be interesting to see this socialist economist calculate the dollar effect of 9-11 on our economy.

[Sgt_Schultze]

...Stiglitz wrote: "It seemed he had hoped to tame the bubble -- and save the nation from a bubble-bursting -- by words alone. Greenspan had overestimated his influence."

Sounds as though Stiglitz overestimates his own influence too. A great question to ask clintonphiliacs, who profess the excellence of clinton and claque is, "what is it exactly that clinton did, every day to run the economy so well?"

[Bon mots]

Stiglitz's first book railed on the Reagan administration for ruining the IMF and World Bank. Said that Reagan changed those noble organizations for the worse... funny thing though... he was a member of the Clinton cabinet for 8 years long after Reagan was gone, and could have very easily undone it all... no mention of this.

How can it all be Reagan's fault if Stiglitz was the Guru for the 8 Clinton years and even ran the World Bank. Yet he trys to pin today's problems on a popular Repbublican president that was elected twentythree years ago. Unbelievable. What an a$$.

He had 8 years to fix things under Clintoon/Bore. Did nothing. Now he's whining that it's all Reagan's fault.

[bandleader]

What was it that Polonius said to his son?Wasn'y it:"Never A Borrower Nor A Lender be"??

[SierraWasp]

"...but also an active government role in health, education and job creation."

What the hell is he talking about? That's either Facism or Socialism, or more likely a mixture, reminicent of Hitler!!! (or Hitlery!!!)

Governments role is to either lead, follow or get the hell out of the way while providing infrastructure!!! I prefer the latter!!!

[Grampa Dave]

He is a left wing Columbia so called economist. So he is a socialistic to his bones.

[hoot2]

""what is it exactly that clinton did, every day to run the economy so well?" "

klinton motto:
a b.j.(lewinsky), a day, keeps "inflation away..."

[SierraWasp]

"The Roaring Nineties"

"Clinton gets that and Reagan's recovery is called "The Decade of Greed"."

I thought is was more of a repeat of "The Gay Nineties," with a twist!!!

[JmyBryan]

"Twenty years ago, my best students went into the Peace Corps. In the '90s they all went into Wall Street."

Maybe Peace Corps parents advised their children that creating individual wealth was a far more satisfying and benevolently effective career choice as opposed to administering idealistic, ineffective, wasteful international government welfare programs?

[gipper81]

I'm glad nobody here believes in Stiglitz economics. Yet, the striking supermarket workers in CA would.

If implemented, Stiglitz economics would produce Jimmy Carter stagflation. Stiglitz believes in a no-growth economy or one that he manages and approves.

My advice to Stiglitz: MOVE TO CANADA. Don't screw with a real economy and real motivated capitalists trying to make this work.

Stiglitz economics is just the same old crap.

[Mo1]

.

[alex]

"It seemed he had hoped to tame the bubble -- and save the nation from a bubble-bursting -- by words alone. Greenspan had overestimated his influence."

There is one thing I am 100% sure: Bill Clinton read Greenspan's FBI file. And I would not be surprised to learn that he demanded in very informal term no bubble-bursting until he leaves the office.

[gipper81]

We have a strong dollar now, vs. the euro for instance?

[PhilipFreneau]

Now the Columbia University professor's new book "The Roaring Nineties" says President Bill Clinton's economic team, in which he played a key role, doomed the very recovery they had tried to engender by equating the interests of Wall Street with those of the nation at large.

My wife and friends will laugh at this "Roaring Nineties" statement. I started calling the 1990's "the Roaring Nineties" about 1993. My reasoning was not necessarily economic, but due other factors, such as the loosening of morals, prohibition, etc., that were similar to the "Roaring Twenties".