Stiglitz Pans Obama's State Of The Union Address, Calls Focus On Jobs "A Little Late", Sees Bankers Creating Bubbles

The Nobel laureate points out the obvious: with the stimulus coming to an end and states facing major shortfall, the president's actions are a "big move in the right direction but not enough." Stiglitz calls for more intervention, and the real question is how to spend the money: says critical rate of return on public investments to have lower long-term national debt is only 6%. Therefore must direct money on technology, infrastructure, education. Yet by plowing money into banks, the return was zero (if not negative). "When putting banks on welfare, there were no condition like -they out to lend." Another observation: banks which borrow at zero rates, "look around the world where to invest and put their money abroad- they create bubbles in emerging markets, earning the angst and anger of people in those countries as the same time as they earn the angst and anger of people in the US."

Lastly, to the question if the president is being too populist with his approach, Stiglitz responds with a resounding no.

Interview courtesy of Bloomberg