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Joseph Stiglitz, Nobel Laureate and Professor at Columbia University believes that the US economy was and still is sick. He believes that it will remain sick because of bad choices that have been made from 2008 onwards:
“Soon after the global financial crisis erupted in 2008, I warned that unless the right policies were adopted, Japanese-style malaise — slow growth and near-stagnant incomes for years to come — could set in.”
The right policies have not been adopted. Financial institutions are still not doing much more than speculating, rather than investing.
Imbalances are rife and inequalities abound. We hardly need to look very far to see that nothing is changing except (maybe) getting worse.
Stiglitz states today in an interview with CNBC: “On both sides of the Atlantic, GDP is likely to grow considerably faster this year than in 2013. But, before leaders who embraced austerity policies open the champagne and toast themselves, they should examine where we are and consider the near-irreparable damage that these policies have caused.”
Stiglitz believes that downturns in the economy come to an end at some point in time. Although perhaps, what might be true in this case is that policies have done nothing to exacerbate and render the problem almost irreparable. Economics is not clear-cut and no it can’t be made better by adding A and B and ending up with C. But, what can happen, even in simple math is that A plus B ends up with the result Z. We are right down there at the bottom with the simple math the governments have been doing. The policies that have been implemented will not and have not made the downturn in the economy shorter. They have not cushioned the landing to make it easier. Stiglitz calls the damage as a result of the policies ‘long-standing consequences’.
The situation has simply got worse. We are not even at a point where we are back to levels of growth that we were seeing before 2007 and the financial crisis. The truth is the financial crisis hasn’t ever come to an end and it certainly hasn’t seen things getting any better. Whether it be in Europe or in North America, the figures speak for themselves.
• Germany, which is considered to be the best of a bad bunch in the EU, has only seen a 0.7%-growth rate over the past six years, on average.
• There needs to be no finger pointed (we all know) at Greece as the country that has performed the worst since the economy has shrunk by 23%. Yet, the Troika congratulates itself on the good job done at stopping the country going under. Perhaps we just don’t have the same set of values any more.
• The US is still underperforming by 15% had it grown at the same rate as it was prior to the crisis.
• If that’s not enough to convince anyone, median real income in the USA is below levels that were attained in 1989.
• You would have to go back 40 years to see full-time male-worker median salaries at the level they stand at today.
The economists were either so bad at predicting the downfall of the economies in the world prior to the crash, or otherwise they did their darnedest to pull the wool over the eyes of the rest of the public (everyone but the banksters and the policy-makers; after all they were in on the secret, weren’t they?). There’s hardly anyone that would openly admit that the economy is going to get better, is there? Do people still believe that or is it all still media hype with a whole load of spin to get us to vote them back into position of power and authority so the scheming can continue?
Government policies won’t change as we are so far now down the river that any amount of paddling up the proverbial creek will have little effect on what is going to be a bitter time of discontent. At one time the discontent only lasted for a winter, but, now it’s here to stay. It’s going to be a bitter winter of discontent. Long, hard and cold. The policy makers won’t change because they haven’t got an answer and they won’t change because they are still pandering to the banksters and shoring up the stock markets in the hope that there will be MOAR.
The polices undertaken by the governments of the entire western world have heightened inequalities in society. Inequalities of wealth, between men and women, between the old and the young. The economies of those countries cannot right themselves because of the inequality that exists between people; the’ haves and the have-nots’ has never been a more fitting description. But, inequalities will lead to further reductions in demand. The rich get richer, hoarding their wealth and they stop spending; the poor have no money left as we listen to government leaders pontificating and vociferating about how the ‘coffers being empty’.
Governments have reacted like we all watch them do when there is a tsunami, an oil-spill or an earthquake. They stand and watch from their offices and then when it’s too late they put their wellies on and hop into a helicopter to fly over the disaster zone. It’s too late now. The poor will have to get used to looking on as the rich accumulate more. The former will have to adjust their standard of living, as the ultra-high-net-worth individuals add another $2 trillion to their wealth in 2013 (up to $30 trillion now). The poor are the 90% that own just 13% of the world’s wealth. Peanuts.
Why would governments take that into consideration? We don’t even go to vote these days as much as we used to. We have given up. Giving up means they have won.
Originally posted: Stiglitz: “Sick”! [9]
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