Stiglitz rips Greenspan

[duvinnie]

Joseph Stiglitz is sure there'll be no big economic recovery, and blames Bush and Greenspan. It would be dangerous to ignore his pessimistic forecasts, says Faisal Islam

(Stiglitz is former chief economist of the world bank)

http://observer.guardian.co.uk/bush/story/0,8224,1061022,00.html

When Clinton planned to spend more on social plans and anti-poverty initiatives, the Fed Chairman stopped him in his tracks because he so favoured deficit reduction. In 2001, however, he backed the tax cuts that led to the current huge deficits. Such actions 'betrayed Greenspan's dishonesty' and were 'very partisan economics,' Stiglitz says.

[montanacowboy]

1. Greenspan is manipulating

the economy for the benefit of the BFEE - remember how he raised interest rates 7 times during the Clinton Admn? because "the economy was heating up and we MIGHT have inflation?"

OK, so now the economy is heating up (?) 7% GDP and what does the old dried up creep do about interest rates? N O T H I N G!!!

Got to keep their boy going as long as they can.

[duvinnie]

3. greenspan

is leading us down the same path Japan took in the 90s. He is just serving in *'s court.
I hope there is some way to avoid the train wreck we will have with him at the controls
of the economy.

[papau]

2. I love the direct quote-and how can anyone argue with a 60's MIT econ grad

"More jobs have been lost under Bush than since Herbert Hoover and the Great Depression,' he said in an interview. 'In the private sector more money has been wasted through misallocation of capital in the stock-market bubble than the government could ever manage.The huge tax cut in the US was very badly designed to stimulate the economy. And there has been a huge increase in mainly military spending. Yet what is remarkable is how little stimulus has been given. The US economy is still in a precarious state,

'"deficit will absorb the US political economy for years to come. We're back to the Reagan era. The trade deficit has the underlying problem of what will happen when foreigners decide to stop funding the US deficit. On the private side there is a huge gap in private pension funds. Any other economy would be under water."

"What is likely to happen is more of a languishing malaise, with very weak job recovery. China has joined the WTO and is now the manufacturing engine of the world. Manufacturing is now down to 14 per cent of the economy. Those last few per cent are going to be very painful."

Name Joseph Stiglitz
Born 9 February 1943
Education: Amherst College; MIT PhD
Career: Economics professor at Princeton, Stanford and MIT; Chairman of President Clinton's economic council, 1995-9; chief economist and senior vice-president, World Bank, 1997-2000

[duvinnie]

4. "manufacturing down to 14%"

and of course the govt is "sexing up" the comparisons to show that no, manufacturing is
about the same % as in past decades, it is all fog and mirrors like everything in this
admin. China is indeed the engine for manufacturing, and India is turning into the
engine of the service economy.

At this rate all we will have left is Taco Bell: we will go eat there for fine dining and
our children will work there for their college tuition. :mad: