Joseph E. Stiglitz's Blog, page 3
January 12, 2021
Is Donald Trump an aberration or a symptom of a deeper US malady?
The underlying causes of Trump’s rise to power must be addressed, from taming social media to tackling inequality
The assault on the US Capitol by Donald Trump’s supporters, incited by the president himself, was the predictable outcome of his four-year-long assault on democratic institutions, aided and abetted by so many in the Republican party. And no one can say that Trump had not warned us: he was not committed to a peaceful transition of power.
Many who benefited as he slashed taxes for corporations and the rich, rolled back environmental regulations and appointed business-friendly judges knew they were making a pact with the devil. Either they believed they could control the extremist forces he unleashed, or they didn’t care.
Related: Why the Democrats should not impeach Donald Trump | Simon Jenkins
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October 3, 2020
How the Republican party threatens the US republic | Joseph Stiglitz
Without a big election victory for Democrats at all levels, Republican minority rule will be locked in indefinitely
Whereas Nero famously fiddled while Rome burned, US President Donald Trump has famously hit the links at his money-losing golf courses while California burns – and as more than 200,000 Americans have died of Covid-19 – for which he himself has now tested positive. Like Nero, Trump will undoubtedly be remembered as an exceptionally cruel, inhumane, and possibly mad political figure.
Until recently, most people around the world had been exposed to this American tragedy in small doses, through short clips of Trump spouting lies and nonsense on the evening news or social media. But in late September, tens of millions of people endured a 90-minute spectacle, billed as a presidential “debate”, in which Trump demonstrated unequivocally that he is not presidential – and why so many people question his mental health.
Related: Covid-19 and the climate crisis are part of the same battle | Jeffrey Frankel
Related: Why Joe Biden is better than Donald Trump for the US economy | Nouriel Roubini
Continue reading...How the Republican party threatens the US republic
Without a big election victory for Democrats at all levels, Republican minority rule will be locked in indefinitely
Whereas Nero famously fiddled while Rome burned, US President Donald Trump has famously hit the links at his money-losing golf courses while California burns – and as more than 200,000 Americans have died of Covid-19 – for which he himself has now tested positive. Like Nero, Trump will undoubtedly be remembered as an exceptionally cruel, inhumane, and possibly mad political figure.
Until recently, most people around the world had been exposed to this American tragedy in small doses, through short clips of Trump spouting lies and nonsense on the evening news or social media. But in late September, tens of millions of people endured a 90-minute spectacle, billed as a presidential “debate”, in which Trump demonstrated unequivocally that he is not presidential – and why so many people question his mental health.
Related: Covid-19 and the climate crisis are part of the same battle | Jeffrey Frankel
Related: Why Joe Biden is better than Donald Trump for the US economy | Nouriel Roubini
Continue reading...August 4, 2020
Letter from economists: to rebuild our world, we must end the carbon economy
The carbon economy amplifies racial, social and economic inequities, creating a system that is fundamentally incompatible with a stable future
From deep-rooted racism to the Covid-19 pandemic, from extreme inequality to ecological collapse, our world is facing dire and deeply interconnected emergencies. But as much as the present moment painfully underscores the weaknesses of our economic system, it also gives us the rare opportunity to reimagine it. As we seek to rebuild our world, we can and must end the carbon economy.
This moment creates an opportunity to bring about a better future for ourselves and our children
This letter has been signed by more than 100 economists. See the full list of signatories here
Continue reading...August 2, 2020
A global debt crisis is looming – how can we prevent it? | Joseph Stiglitz
There is an urgent need for wide-ranging debt relief in the midst of the coronavirus pandemic
While the Covid-19 pandemic rages, more than 100 low- and middle-income countries will still have to pay a combined $130bn in debt service this year – around half of which is owed to private creditors. With much economic activity suspended and fiscal revenues in free fall, many countries will be forced to default. Others will cobble together scarce resources to pay creditors, cutting back on much-needed health and social expenditures. Still others will resort to additional borrowing, kicking the proverbial can down the road, seemingly easier now because of the flood of liquidity from central banks around the world.
From Latin America’s lost decade in the 1980s to the more recent Greek crisis, there are plenty of painful reminders of what happens when countries cannot service their debts. A global debt crisis today will push millions of people into unemployment and fuel instability and violence around the world. Many will seek jobs abroad, potentially overwhelming border-control and immigration systems in Europe and North America. Another costly migration crisis will divert attention away from the urgent need to address climate change. Such humanitarian emergencies are becoming the new norm.
Continue reading...July 12, 2020
Covid-19 is no excuse for sovereign creditors to move the goalposts on debt
Vulture funds want to change Argentina’s debt structure. We need to stop them from setting a dangerous precedent
In the wake of Covid-19, there is an urgent need for sovereign debt restructuring, including debt relief. In the circumstances caused by the pandemic, many countries’ repayment obligations could have devastating social consequences if they are not adjusted. Financial markets face risks of sovereign default.
While some ad hoc relief has already been promised by official creditors, indebted poor countries are again facing private creditors without a sovereign-debt restructuring mechanism – the global equivalent of a bankruptcy regime. In the absence of such a framework, called for by the United Nations General Assembly and advocated by many experts and stakeholders, there have nevertheless been some constructive innovations in contractual approaches to sovereign debt. These address at least some of the collective-action problems of restructuring, including opportunistic holdout behaviour.
Related: Invest in the green economy and we'll recover from the Covid-19 crisis | Joseph Stiglitz
Continue reading...July 2, 2020
Invest in the green economy and we'll recover from the Covid-19 crisis | Joseph Stiglitz
We must target public spending on green, labour intensive projects which have far more bang for their bucks than tax cuts
Although it seems like ancient history, it hasn’t been that long since economies around the world began to close down in response to the Covid-19 pandemic. Early in the crisis, most people anticipated a quick V-shaped recovery, on the assumption that the economy merely needed a short timeout. After two months of tender loving care and heaps of money, it would pick up where it left off.
It was an appealing idea. But now it is July, and a V-shaped recovery is probably a fantasy. The post-pandemic economy is likely to be anaemic, not only in countries that have failed to manage the pandemic (namely, the US), but even in those that have acquitted themselves well. The International Monetary Fund projects that by the end of 2021 the global economy will be barely larger than it was at the end of 2019 and that the US and European economies will still be about 4% smaller.
Related: The post-coronavirus economic recovery must be led by the US | Mohamed El-Erian
Continue reading...April 6, 2020
World must combat looming debt meltdown in developing countries | Joseph Stiglitz
If international community wants to avoid wave of Covid-19 defaults it needs to start rescue plan
As it spread from one country to another, the coronavirus paid no attention to national frontiers or “big, beautiful” border walls. Nor were the ensuing economic effects contained. As has been obvious since the outset, the Covid-19 pandemic is a global problem that demands a global solution.
In the world’s advanced economies, compassion should be sufficient motivation to support a multilateral response. But global action is also a matter of self-interest. As long as the pandemic is still raging anywhere, it will pose a threat – both epidemiological and economic – everywhere.
Related: Now the world faces two pandemics – one medical, one financial | Robert Shiller
Continue reading...January 30, 2020
World leaders talked the talk at Davos but we need some real change | Joseph Stiglitz
Excessive faith in markets and scepticism of government won’t tackle the global crises we face
This year marked the 50th anniversary of the World Economic Forum’s flagship meeting of the world’s business and political elites in Davos, Switzerland. Much has changed since my first Davos in 1995. Back then, there was euphoria over globalisation, hope for ex-communist countries’ transition to the market, and confidence that new technologies would open up fresh vistas from which all would benefit. Businesses, working with government, would lead the way.
Today, with the world facing climate, environmental, and inequality crises, the mood is very different. Facebook, willing to provide a platform for mis-/disinformation and political manipulation, regardless of the consequences for democracy, has shown the dangers of a privately controlled monopolistic surveillance economy. Corporate leaders, and not just in the financial sector, have displayed remarkable moral turpitude.
Related: What did we learn from Davos 2020?
Continue reading...January 19, 2020
Donald Trump is a good president … but only for the top 1%
On all economic measures, from jobs to health to GDP to disposable income, the president has failed America
As the world’s business elites trek to Davos for their annual gathering, people should be asking a simple question: have they overcome their infatuation with the US president?
Two years ago, a few rare corporate leaders were concerned about climate change, or upset at Donald Trump’s misogyny and bigotry. Most, however, were celebrating the president’s tax cuts for billionaires and corporations and looking forward to his efforts to deregulate the economy. That would allow businesses to pollute the air more, get more Americans hooked on opioids, entice more children to eat their diabetes-inducing foods and engage in the sort of financial shenanigans that brought on the 2008 crisis.
Related: Is Donald Trump's Iran strategy working?
Continue reading...Joseph E. Stiglitz's Blog
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