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Joseph Stiglitz Was Right: Suicide

Pivotfarm's picture




 

It’s a rare man that is recognized for his achievements during his own lifetime. Normally, the geniuses of the world have to wait until they are dead to get any sort of recognition, let alone strike it rich. We never like giving recognition to people as it makes our own status decrease.

Except, that’s more of a thing of the past, isn’t it? Our super-fast world at the press of a button and at our fingertips means that we no longer have the possibility of putting that off until the ones with the knowledge are forgotten bywords of a bygone era. It happens here and now, these days.

Joseph Eugene Stiglitz was awarded the Nobel Prize in Economic Sciences in 2001. We have constructed the world in which we live on recognition and awards. But, they are just for giving. They are not for anything else. We take no heed of what the ones that have been recognized might have to say or declare. They can go blue in their face, we have delusions of grandeur. Who gave them the prize anyhow?

In 2012, talking of the European Union’s austerity plans, Stiglitz had just one word to say. It was “suicide-pact”. He went on to say last year that imposing austerity on the citizens of the EU would do nothing more than lead to the collapse of the economies of those very same countries. Nobody listened to him then and nobody is listening to those words now. Politicians today in the EU are so hell-bent on retaining power that they have transformed themselves into economists, without any ability or reason. Politics is the governing element that will lead to the downfall of our economic structures because we are governed by flawed responses from people that have no idea what economics is about.

Isn’t it Keynesian economics that shows that austerity can only be put in place when the economy is on an upper? Didn’t Keynes say: “The boom, not the slump, is the right time for austerity at the Treasury"? Haven’t they learnt that a country was nothing like running a household? Margaret Thatcher got it all wrong. If we all reduce our budgets and we all stop spending at the same time, then where’s the money going to come from? Is it going to magic somehow out of the magician’s hat? Undoubtedly, it will disappear down the rabbit hole along with the white rabbit that Alice chased after. Chasing white rabbits, that’s what we’re doing.

Cutting our spending all at the same time can only bring about the paradox of thrift. Some may criticize it and say it’s not true. But, in order for their arguments to hold up, we would have to export our way out of the recession and that we are not doing today. It would also have to be done at the same time as currency devaluation. That we are definitely not doing…we just know how to put the modern technology that we have created to good use: printing new shiny notes and throwing them at the people.

Take the example of the UK. The British believe that they export more to the EU than they import. They don’t believe the figures that show the contrary. That’s because they are living on the lies that their politicians have constructed. In March (and this is just one example, but the past is just as true) 2013, the difference between the value of goods imported by the UK and the value of the goods exported stood at $6.1 billion. The UK has a trade deficit that is growing (March: an increase of 31.8%). Will this help the UK export itself out of their recession? Hope against hope, we might pull it off. But, the paradox of thrift has been around since the 18th century when Bernard Mandeville (another guy that has been forgotten) wrote The Fable of the Bees. But, the bees are disappearing too, aren’t they these days?

The EU is in a slump, austerity can only bring us down. Yet, the politicians that we have voted into power seem to believe that its austerity, contrary to what the past has shown us; that will get us out of that rut.

We have spent decades, even centuries, wishing for others to follow in our footsteps and create what we have built our societies upon. Now, they are on the cusp, on the verge of doing it and succeeding possibly even better than we were able to do in the US and the EU, we are floored. We are telling them that they are wrong.

But, Stiglitz was right; we have signed a suicide-pact. We have decided that we need to destroy everything and start again. That’s what normally happens when those that are lagging behind finally catch up with us, we change the boundaries, so they are lagging behind again. But, this time, it’s our own death that will come about. Our economies will die. The politicians are not economists. They can’t tell us what will happen and what bright new future they will construct. But, they are the ones that are the apprentice-sorcerers that are waving the wands, dressed in economists’ clothes.

Originally posted Joseph Stiglitz was right

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Mon, 06/03/2013 - 16:06 | 3621218 Peter Pan
Peter Pan's picture

I am not advocating violence but I believe that things will not change in any country until the assasination of a couple of high profile politicians take place. Then when the people start to smell the blood and the fear of their masters, who knows what follows.

Mon, 06/03/2013 - 15:48 | 3621130 Fishhawk
Fishhawk's picture

Please note that democracy, ie, mob rule, is not a good form of government, because the takers now outnumber the makers, and they vote themselves the fatuous 'free lunch.'  The makers are being robbed under the premise of 'the common good.'  Obummer is not a communist (indeed there do not seem to actually be any communists anymore); he is a fascist.  All the great empires have been, and will continue to be, fascist.  Under the fascist premise, private enterprise can own the forces of production, but the state makes all the decisions about how these will be deployed.  The key feature of fascism is that there is no rule of law.  There is rule of man, with the crooks taking over the machinery of government, and bending it to whatever helps maintain the ponzi.  Fascism always wins, because it is the oligarchy (moneyed elite) getting their way, while maintaining a thin veneer of respectibility under the pretense of democracy.  Thus, expect more fascism, and less rule of law, and thus less individual freedom, and less prosperity, here in the good ole USSA. 

Fishhawk

Mon, 06/03/2013 - 16:11 | 3621234 Peter Pan
Peter Pan's picture

No form of government is a good form of government unless punishment is a vital centrepiece for those that either fall foul of their public duty or for those who rob the public in their private cpacity.

This in my view has been the major failing since the GFC and the reaon why bankers and politicians still arrogantly continue as if nothing has happened.

Mon, 06/03/2013 - 15:24 | 3621050 par4
par4's picture

What a load of SHIT. First off NO ONE has ever been awarded a "Nobel Prize" in economics. Swedish Reichsbank Prize,Yes, a Nobel,No! Second and most importantly is that economics is NOT a science. Has never been and will never be. It is nothing but an invention of the human mind. It is nothing but make-believe, just like religion.

Mon, 06/03/2013 - 16:19 | 3621268 TheReplacement
TheReplacement's picture

http://www.nobelprize.org/nobel_prizes/economics/laureates/

I don't really care if it is a science or not.

Care to try to prove your last bit about religion or are you expecting us to take your word for it as a matter of faith?  That would be... ironic.

Mon, 06/03/2013 - 15:01 | 3620980 alfbell
alfbell's picture

 

 

Short... modern governments.

Long... autonomous, smaller entities (problem = this investment will take a century since large empires and infrastructures die slowly)

Mon, 06/03/2013 - 14:26 | 3620866 moneybots
moneybots's picture

"Didn’t Keynes say: “The boom, not the slump, is the right time for austerity at the Treasury"? Haven’t they learnt that a country was nothing like running a household"

A country is made of numerous households. The math is the same, no matter how large the entity.

The fact is that a boom ends in a bust.  More financial fraud is not going to solve the problem.  We would be in the midst of a new boom, if that were the case. 

Having a central bank was supposed to smoothe out the boom and bust cycle.  Having an interventionist government was supposed to smoothe out the boom and bust cycle.  Quite simply it doesn't work. The Nasdaq crashed and the housing market crashed.  Interventionism does not prevent financial fraud.  If anything, it encourages it.

 

Mon, 06/03/2013 - 13:58 | 3620791 moneybots
moneybots's picture

"The EU is in a slump, austerity can only bring us down. Yet, the politicians that we have voted into power seem to believe that its austerity, contrary to what the past has shown us; that will get us out of that rut."

 

What the EU is doing is not austerity.  Austerity is living within your means.  The EU is running deficits.

Try austerity first, before criticizing it.  You don't get out of a hole by digging a deeper hole.

The U.S. governent did not intervene in the 1921 recession and it corrected itself by washing out the bad debt.  The ongoing government intervention is preventing the bottoming out from occurring, thus prolonging what is now a depression.

1+1 ALWAYS = 2, regardless that the government meddlers want it to = 3.

Mon, 06/03/2013 - 14:31 | 3620890 Bear
Bear's picture

I think the US .gov is waiting until everyone is all in (money in the banks, stock, bonds) before pulling the plog and turning off life supports 

Mon, 06/03/2013 - 13:56 | 3620789 WaEver
WaEver's picture

Freddie

Can you sent this youtube link to stiglitz
Preferably wrapped in a brick

Mon, 06/03/2013 - 12:57 | 3620607 SmittyinLA
SmittyinLA's picture

there's a Construction housing boom right now, the builders say they can't find enough workers willing to work for minimum wage (40% less than those that care not to work at all).

Mon, 06/03/2013 - 13:08 | 3620658 Go Tribe
Go Tribe's picture

Mortgage rates are low, but the per square foot costs are going through the roof. This housing rebound won't last for long.

Mon, 06/03/2013 - 14:36 | 3620909 Bear
Bear's picture

Especially with wages going down. In SoCal sheeple are lining up to bid homes up, up, up only to get the last of the low interest (low qual) loans. 

Mon, 06/03/2013 - 12:43 | 3620554 chogopogo
chogopogo's picture

Are you joking? What austerity???

Mon, 06/03/2013 - 12:13 | 3620429 NoTTD
NoTTD's picture

I can't tell if this is serious commentary or not.  Parts of it reads like a parody.

Mon, 06/03/2013 - 12:06 | 3620398 ebworthen
ebworthen's picture

Stiglitz rhymes with Chiclets, coincidence?

Mon, 06/03/2013 - 11:40 | 3620350 nowhereman
nowhereman's picture

"The politicians are not economists. They can’t tell us what will happen and what bright new future they will construct. But, they are the ones that are the apprentice-sorcerers that are waving the wands, dressed in economists’ clothes."

This, in a nutshell, is the real problem. The belief that  economists "know", and that politicians "do".  And best of all, that either of them can prediict the future.  This is the major flaw in most peoples thinking, that is, that some "expert" will save the day.  And it is this flaw that the main stream media and the author of this piece use to keep sheeple from thinking for themselves.  Peole thinking for themselves is very dangerous indeed.  Bring on the "expert."

Mon, 06/03/2013 - 11:22 | 3620291 the grateful un...
the grateful unemployed's picture

yeah austerity in the middle of an economic slump, is like the government taking peoples gold at the bottom of the great depression. then there really was no money. first off the government isn't  the only one engaged in money printing. sure they actually make the dollars, but the private sector [also]creates cash through easy credit, and new loans and new economic activity (housing ATM, and rising healthcare costs) equal new money. consider what a broken leg costs fifty years ago, and what it costs now.

austerity is their code for controlling the money supply. right now in the US there is the phoniest housing asset recovery on record (first time buyers getting pushed aside by flippers, who are simply doing whath the vampire squid does every day, front running the market) the problem is too much credit, and credit austerity is what is needed. the chickens came home to roost and now inflation is being baked into the system. Bernake can't stop this without raising rates, sayonara BB

Mon, 06/03/2013 - 11:05 | 3620241 Lordflin
Lordflin's picture

We live in an age of self proclaimed experts... I, for one, am sick of their pontificating...

We use to have wisdom, now we have knowledge... A poor substitute... The opposite of wisdom is foolishness... Our self proclaimed experts are fools....

The suicide pact had nothing to do with austerity... rather it involved the surrender of sound money and a free market economy for fool's gold and a managed economy...

Mon, 06/03/2013 - 11:03 | 3620236 aerojet
aerojet's picture

Until the Nobel Prize people claw back Obama's Peace Prize, I think their credibility is in the toilet.  As far as the suicide pact goes, it's a stupid turn of phrase because now the situation is like this--they either keep the printing going and destroy us or they stop printing and destroy us.  Thus, there is nothing meaningful to any message advising this or that plan because no plan will get us out of the bind.

Mon, 06/03/2013 - 15:47 | 3621126 August
August's picture

That will be tough, as the actual Nobel Prize Committee has nothing to do with Swedish Riksbank prize "in memory of" Alfred Nobel.

FWIW I think we all know that the prizes for Physics, Chemistry and Medicine are serious awards for serious achievement. The awards for Peace, Literature and "Economic Science" are (largely) whore-awards for the politically correct, in servive to the status quo.

Mon, 06/03/2013 - 13:02 | 3620634 dtwn
dtwn's picture

Don't forget Krugmans Nobel.

Mon, 06/03/2013 - 11:03 | 3620235 Hongcha
Hongcha's picture

At this point western Federal governments are cancerous growths, nothing more.  Invasive, metastisizing.

Mon, 06/03/2013 - 10:32 | 3620104 nofluer
nofluer's picture

If we all reduce our budgets and we all stop spending at the same time, then where’s the money going to come from?

If we all reduce our budgets and stop spending, we will be doing what is called "saving" and "The money" will come from the availability of capital for companies to expand and to start up. That's how a healthy economy works, but given the economic BS of the past 25 years I guess most people have forgotten that.

 

Mon, 06/03/2013 - 11:16 | 3620277 Winston Smith 2009
Winston Smith 2009's picture

"given the economic BS of the past 25 years"

A simplistic, garbage economic theory, proven to be horribly wrong time and time again is being used in an attempt to run the world, with models based upon it being fed with manipulated government economic data.  What result would one expect?

Minsky Introduction Video

http://www.youtube.com/watch?v=jIP7ES1lCGk

Stephen Keen interview on RT

http://www.youtube.com/watch?v=lnwEGeMQRCs

 

Mon, 06/03/2013 - 11:04 | 3620238 aerojet
aerojet's picture

Basically, any sort of common sense would be handy instead of foot to the floor 100%.

Mon, 06/03/2013 - 10:49 | 3620173 LawsofPhysics
LawsofPhysics's picture

Correct, banks would have to be banks again and actually work for a living by loaning out (and paying interest) the money of savers.  This goes a long way towards prevent capital and resource mis-allocation and mal-investment.

Mon, 06/03/2013 - 09:48 | 3620004 Seasmoke
Seasmoke's picture

It is much harder to be a thief in the private sector , than a thief in the public sector.

Mon, 06/03/2013 - 09:59 | 3620024 cifo
cifo's picture

What a misleading title. I thought Stiglitz commited suicide for being wrong.

Mon, 06/03/2013 - 10:36 | 3620132 Stoploss
Stoploss's picture

That will be others. They will have assistance im sure.

Humans only have the ability to follow plans that fail, and any plan deemed to be succesful, will be "re-interpreted" until it is re- written to fail.

The Keynes theory, had it been properly followed, in most cases would have worked.  That, however, takes place in another world devoid of humans.

Jealousy, vanity, lies, get the picture?

Mon, 06/03/2013 - 10:08 | 3620049 Steve in Greensboro
Steve in Greensboro's picture

I agree.  What a tease. 

Q: What do you call a 6 passenger van going over a cliff with Ben Bernanke, Paul Krugman, Jared Bernstein, Brad Delong and Joe Stiglitz in it?

A: A missed opportunity.

Mon, 06/03/2013 - 09:28 | 3619961 artless
artless's picture

I do hope that te article is just a poor attempt at sarcasm. Name one governemnt cutting ANYTHING. Not happening.

Economies do not die they just take a different shape. By dead one would have to assume that all trade and human action would just cease. What will change is that paradigm of the wizards of the financial system who are nothing more than parasites will lose their grip on the wealth. Their economy will die along with the economy of the statist criminals who have brought us to where we are. Too fucking bad. Perhaps all the assholes drowning in their paper migth try doing something productive for once.

Stiglitz is just another Ivy League blowhard Keynesian crypto-fascist who has never done anyhting but pave the way for the elitist masters to control all aspects of economic activity and thereby control mankind.

 

Mon, 06/03/2013 - 09:24 | 3619956 onthesquare
onthesquare's picture

Actually Canada's Prime Minister is a trained Economist but he has a problem with the truth.

Mon, 06/03/2013 - 09:57 | 3620019 DOT
DOT's picture

Wow! a real "trained  Economist".  Will he dance if I toss him a peanut?

Mon, 06/03/2013 - 09:31 | 3619967 RSloane
RSloane's picture

All modern economists have a problem with the truth. Why should he be any different?

Mon, 06/03/2013 - 09:15 | 3619941 williambanzai7
williambanzai7's picture

Now we understand who this we you are referring to is.

Mon, 06/03/2013 - 09:10 | 3619928 F. Bastiat
F. Bastiat's picture

Keynesian-ism, like Marx-ism, is based upon a fantastical view of human nature.

Human nature is aggressive, selifsh, and sinful - a simple fact that makes the fantasies of Keynesian-ism just that.

While reason is an element of the human nature of some hominids, human nature is a far more powerful force.

Mon, 06/03/2013 - 09:29 | 3619965 francis_sawyer
francis_sawyer's picture

So why the fuck bother with all the 'isms'... 'ISMS' are for pseudo intellectuals to debate... Just focus on human nature...

Mon, 06/03/2013 - 10:51 | 3620185 F. Bastiat
F. Bastiat's picture

Because the 'isms are the systems of thought.

In other words, there are two forces at work:

 

1 - The system of thought, the ideology

2 - Human nature

 

For better or worse, there's only one system of thought that recognizes the simple truths of human nature and it's not marxism, socialism, communism, or Keynesian-ism.

Mon, 06/03/2013 - 11:57 | 3620382 AnAnonymous
AnAnonymous's picture

Yeah, there is only on system and that is that system of ours, Americanism.
Best thing to ever happen to humanity.

Signed: an American.

Mon, 06/03/2013 - 12:58 | 3620613 F. Bastiat
F. Bastiat's picture

In the West, at least, there are three major ideologies, with the first two being dogmatic systems of thought:

 

1. Marxism, and its derivatives socialism, national socialism, communism, and Keynesian-ism

2. Islamism and its sunni and shia derivatives

3. Western civilization, derived mostly from Christianity, the scientific method, and applied science

Mon, 06/03/2013 - 09:40 | 3619988 disabledvet
disabledvet's picture

"balance sheetism." as in "my balance sheet is bigger than yours." this si no academic execs either (although hopefully that makes you laugh....that's the goal of pointing out the absurdity of it all.)

Mon, 06/03/2013 - 08:48 | 3619882 Misean
Misean's picture

So....Ballooning and ever increasing budget deficits is austerity? I am ever amazed at the rapid pace with which words change their meanings.

Could, perhaps, the collapse of the PIIGS have to do with the crude attempt by the various governments to loot whatever remaining real wealth remains among the populace so that it can be poured into the banks thus allowing these insolvent institutions to limp yet another lap around their graveyard?

Of course, an even MOAR brilliant sollution, the one you seem to be advocating, would be to further encumber, via the chains of future taxation, the entire populace with an even MOAR rapid rise in government debt, so as to throw even MOAR money ever faster into the gaping maws of the bankrupt banks?

But at least you are trite and glib with the worthless BULLSHIT, with the ever so meaningful "governments aren't like families". Yes, well, true enough, I suppose, unless you take family as defined by La Cosa Nostra. Of course, you cannot define a thing by what it itsn't. A government is at best a parasite, and should the host become weak, the last thing that is needed is for the parasite to become rapacious in its appetite.

Mon, 06/03/2013 - 08:33 | 3619850 Aquarius
Aquarius's picture

"Politicians today in the EU are so hell-bent on retaining power that they have transformed themselves into economists, without any ability or reason. Politics is the governing element that will lead to the downfall of our economic structures because we are governed by flawed responses from people that have no idea what economics is about."

Not just the EU - everywhere; incompetence rules supreme, presidence is mandatory; all must suffer for THEIR (read: Leadership) sins.

This is a Global "leadership" Collapse (GLC) as I have said before, and Einstein et al, before me!

But then, which region is to be the first to collapse?: The USA, the EU or Asia? Who is buying the most Gold (and Silver?)

This page has been left blank intentionally: Your mileage will Vary.

Ho hum

Mon, 06/03/2013 - 08:32 | 3619847 SunRise
SunRise's picture

Keynes most basic flaw was that he was a thief!   He assumed that the State had the RIGHT to rob people of their labor; yet, what is the State, but a gang of folks who voted that you work to support their values rather than your own?   This is known in honest circles as slavery.

Mon, 06/03/2013 - 09:41 | 3619991 falak pema
falak pema's picture

to push in analagous logic the alternative to slavery by state to the same limits that you take statism :

What is Oligarchy rule but neofeudalism? Your labour now belongs to your corporate feudal lord who owns the market and inhibits all forms of competition. His thugs can bully the reps of labour (unions) and corrupt the process of law (state). He owns the world like a colossus. We are there now in first world, he is the banking oligarchy of Jamie Dimon and consorts today; those who created this mess to push state and us the people into this bottomless abyss.

They did it, not the state, that just morphed into their front puppet organisation since Reagan took over in deregulation mode. That's contemporary history written in stone. now the state has to clean out this mess by inevitably raising taxes ad using CB Qe as they have their backs to the wall and no way out. 

Choose between Charybdis and Scylla, fella; thats the lesson of history. 

Unless we can achieve balance, between these two raging totalitarian diseases, we stay Sisyphus. 

Absence of state, or a cowered patsy state, means slavery to Oligarchs and feudals.  Both extremes are noxious as Montesquieu indicated. Separation of powers and transparency/accountability of government with immediate correction and sanctions. Thats rule of honest state answerable to the people.  

There is no middle ground in urbanised civilization; no self regulating utopia.  If we let the tuff rule like thugs we get mugged and shafted. Just ask the Apache people. They were the true libertarians of old unable to adapt to new, with minimal ecological footprints, and as such without adequate protection of their eco system. They went straight into the dustbin of history. 

States and people have to stay coherent or its rule of the thugs every time. 

Don't blame the messenger of state, blame the top dogs of oligarchy dystopian rape. 1929 was their creation and your memory seems to have vanished to understand cause and effect, then as today.

Today the state has to flush out the oligarchs or else this model we call US capitalism dies.

But it will be a long fight that will involve the people or it will be tyranny of military kind in the ultimate analysis as consequent knee jerk. 

Mon, 06/03/2013 - 08:29 | 3619838 Hayek FA
Hayek FA's picture

Suicide for the EU would be the kindest outcome. Build a statute in brussels to commemerate the failure of the Statists (once again).

To keep this cancer riddled comatose patient on Keynsian methodone is sadistic.

Mon, 06/03/2013 - 08:23 | 3619831 proLiberty
proLiberty's picture

In what kind of world is slowing down the rate of currency debasement considered a bad thing that will lead to ruin?

When government is too large a fraction of the economy, and government is financed by credit-expansion and money printing, then "austerity" only has a different, inside-out, upside-down meaning in the world of Keynes.

Mon, 06/03/2013 - 08:16 | 3619827 RobM1981
RobM1981's picture

What Herodutus said.

 

So, where was this genius Nobel Prize winner during the times of plenty?

 

Oh, right... the EU has never run a surplus.  It was designed to run a perpetual deficit, evidently - and Stiglitz, Krugman and the like said not a word of warning.

 

But *now* we're supposed to kneel before their Nobel prize?

 

Sir, the problem is that the prize is now worth less than the metal it is minted from.  It is a worthless token, given from people with a long and demonstrable record of failure.

 

This is not Milton Friedman's Nobel Prize - nor is it Friedman's economy.  Anywhere...

Mon, 06/03/2013 - 09:10 | 3619926 masterinchancery
masterinchancery's picture

Stiglitz is nothing but a money printing, perpetual deficit advocating, Keynesian hack--he wasn't "right" about this or anything else.

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