Joseph Stiglitz

I’m interested in the ideas of Columbia economist Joseph Stiglitz, author of the new book, Freefall. He criticizes the US for not regulating investment practices enough, not investing enough in medium and small business, not investing in big businesses (the ones that failed) in a way that secured a sufficient return for the government (European nations did better with this), and not rearranging work in tough economic times in ways that would hurt people less (Germany and France, much more than the US, did things like shifting people from full-time to part-time work but not taking away their jobs). He thinks the World Bank and the IMF lately are operating in ways that are less destructive of small countries than formerly (formerly they lent to countries in need in ways that set too-stringent conditions and brought about recessions and depressions in small countries; lately they are not doing this and are sometimes doing constructive things). He says the US dollar should not remain the economic standard for the world (with our recent bailouts and stimulus-es we are becoming a less reliable-looking currency backer, I believe), and that some international monetary standard likely should replace it. He says we should have done a bigger initial stimulus and we would have stimulated more job creation if we had, and he thinks we’re likely to have another recession like the 2008 one within the next 10 years because we didn’t handle the last one well enough. He says banking and investing need to be separated institutionally, and regulations should be such that no company ever becomes “too big to fail” (especially not investment companies, I think; some insurance for banks is needed). He says we need to stop having a situation where there is “underwater” investment (like a mortgaged house where an individual owes more on the house than the house is worth), and that a kind of bankruptcy/forgiveness of debt should be legally provided as an “out.” He points out that there has been irresponsible management of capital by a range of people at the top of the $income pyramid to cause more capital from the $bottom to make its way to the top (e.g., predatory lenders who lend at exorbitant rates in sneaky ways; credit card companies who engage in similar practices; etc.).

As it appears to me, what is economically rational is also empathic and moves away from a silly, compulsive, inhumane, and exclusive emphasis on competition and winning over econmic activity that is humane, interestingly diversifying, sustainably empowering, nonviolent, secure, and valuably productive.