Weirdest thing I read so far today


Anyone else find Stiglitz’s op-ed in today’s Globe to be almost completely incoherent?

Filed under:

Weirdest thing I read so far today

  1. Yes, you can find it. But can you *understand* it?

  2. I guess the point he is trying to make lies in the penultimate para where he argues that free market policies, neo-liberalism as he calls it, cannot work in the absence of a close alignment with policies aimed at providing equitable social returns.

    He makes the case in his column that free market policies have not been equitable and have led to a disproportionate share of the burden falling on those that can least afford it. He cites examples of the housing crisis impacting low income, and increasingly even middle income, folks through no fault of their own but through the abysmal risk management practices of lending institutions. He also tries to draw a paralle to what’s happening on the global scale with food prices.

    Surprisingly, or perhaps not since it would draw in the “misallocation” of resources argument into alt energy sources and thus undermine it, he does not bring up the impact of rising energy prices and how that has a direct bearing on food prices, and one could argue, tangentially on the housing crisis.

    This celar things at all, Andrew?

  3. I found it to be a mishmash of confusing and seemingly random links between different ideas.

    The link to neo-liberalism in the article was tenuous at best. (Though it must be hard to make such difficult points in the little space provided)

    I don’t think the article did a good job of linking the “food crisis” to the “housing crisis”

  4. One more reason not to read the Globe and Mail. And how on earth could someone capable of this kind of drivel get the Nobel Prize? Who was the competition?

    And the editors that let this kind of sentence past them:
    “Nor did markets prepare us well for soaring oil and food prices. Neither sector is an example of free-market economics, but that is partly the point”.

    So his point is? I’m with Kadey – time to go shopping!

  5. He’s certainly presented his core argument more
    clearly in the past.And it’s one I agree with.
    So maybe the Glib And Stale’s editors were all at
    a team-building seminar.

  6. “And how on earth could someone capable of this kind of drivel get the Nobel Prize? Who was the competition?”

    While I agree this article was pretty incoherent, Stiglitz at one time was a genuinely great economist. Like inner-circle-Hall-of-Fame great.

    Is he still? Depends who you ask. After reading this article, he’s starting to look like Willie Mays circa 1973 to me.

  7. His point is that, when we take a realistic look at those who are espousing neo-liberalist free-market economics, they only live up to those principles when it benefits them. The rest of the time they seem to prefer interventionist policies. IE, the neo-liberalists are simply greedy liars.

    Unfortunately, he’s not nearly as clear about this in his little digression as he should have been. Which makes the article seem unfocussed.

    But this is why I tend to trust politicians who openly state that they’re going to be interfering in the market. At least with them, we know what to look at. Those who tell you they’re going to be hands-off typically just mean they don’t want you to see where they’re putting their hands.

  8. I like T. Thwim’s interpretation of the article, but he spends the bulk of his article railing against neo-liberalism rather than neo-liberals, such as his assertion that “97 per cent of investments in fibre optics [took] years to see any light” and that whole part where the bangs on about the housing crisis, as if the massive housing boom of the last ten years didn’t happen and his Nobel Prize contains some sort of mindaltering ray that makes economists forget high-school concepts like “the boom and bust cycle”.

    And there’s the part where he mentions how millions of people are without adequate food and shelter. Since most of those people are in countries where the economies are micromanaged by the government, I was half-expecting some stirring finale about how neo-liberal policies are the worst except for all the others, but no, he never even bothered picking that ball up.

    Basically, what I got out of it was “Sometimes the market does things that are stupid. Therefore modern neo-liberalism is a failure, because if the economy was regulated nobody would ever make poor decisions.” I thought his point was rather clear, although seeing somebody ten times smarter than I am saying that somebody elected because he’s taller than the other candidate will make better economic decisions than the combined weight of billions of people is… unsettling.

  9. Well look, I’m no economist. But I know enough about the housing crisis to know that a big part of the problem was not banks and “neoliberalism”, but the fact that the US Government lets you treat mortgage payments as a writeoff. Fanny May and Freddie Mac have contributed enormously to the problem.

    With respect to food, again, recent data (from over on the Marginal Revolution blog) suggest that the single biggest cause of the food crisis is ethanol subsidies.

    So what is Stiglitz’s point? That we blame neoliberalism, except when it is clearly also bad government, in which case we blame… what? Governments that a neoliberal in orientation but which also enact bad policies?

    So what is the lesson — that markets don’t allocate resources efficiently, but governments do, except when they don’t?

    I’m not trying to be obtuse here. I sincerely don’t have a clue wtf Stiglitz is arguing.

    I agree, the man used to be a great economist. I loved Whither Socialism, it taught me tons. But these days he sounds like Naomi Klein.

  10. My impression is that the article was thrown together with some sloppy cutting and pasting from a larger piece, possibly a lecture, given the rambling style.

  11. Ah,yes.Now I see. A great economist can not
    sound like Naomi Klein.
    Must be in the fine print at the U of Chicago.

  12. Right, because everyone who disagrees with Naomi Klein is a neo-liberal.

  13. Not much neo about it. Welcome to the 18th

  14. Stiglitz was a great economist. Emphasis on the WAS.

    So governments going green and screwing up food supplies means “neo-liberalism” is bad. Okayyyyyyyyyyyyyy. And the housing bubble was caused by an overly free market, not by government subsidies for mortgage debt, currency manipulation by Asian countries that increased demand for relatively high yield American debt instruments (supposedly low-risk ones at that), and idiotic consumer groups threatening to sick felony charges if any lender got too choosy with their borrowers (if you deny any minority a loan, ACORN will be on you in 12 seconds). Riiiiight.

    But the obvious solution to the failures in decisions made by the sum total of the population (as represented by markets) and by a small “expert” group (as represented by politicians and bureaucrats) will be superceded by politicians and bureaucrats working alone. Ask Uncle Joe and Uncle Ho, or rather the millions they killed, how that one went the first time.

    Anyone advocating interference with the market should is guilty of crimes against humanity and attempted genocide. Spandau Ballet for them all!

  15. Sorry, thought my last comment made it obvious.

    Stiglitz’ point is that neo-liberalism is as doomed to fail as pure communism, for the exact same reasons — people won’t let it succeed. Those in power are not going to relinquish that power, not to the “proletariat”, not to the “market”, and certainly not to the likes of you and me if they can avoid it.

    His whole article was demonstrating that — the free market principles only get applied where they benefit those already in power. Not where they hamper the exercise or accumulation of power.

  16. T.Thwim:
    But this is why the article was incoherent: people in power don’t apply free-market principles, they use their power to manipulate the market to their own advantage.

    Unsurprisingly, this is not a free-market principle!

    Stiglitz’s article equates crony and monopoly capitalism with neo-liberalism, and then uses the resulting muddle to call out for more government regulation of the market.

    Which of course very much suits those in power, since they are then provided with additional means to enrich themselves.

    Stiglitz is consistent in his arguments: if people have the freedom to act, then they will tend to act badly, so why don’t we get the government to run things for us.

  17. Based on my reading, the article seems to warn against installing fiber-optics in your mansion at this time. I also learned that unlike Reagan or Thatcher, Bush addresses the military-industrial complex completely naked. I think that about nails it.

Sign in to comment.