Joseph Stiglitz on Iceland’s Crisis and Recovery

I would say that Stiglitz is right that Iceland did well in large measure because Iceland was not subjected to the kind of austerity that you traditionally see in these kinds of programs and which is an anti-growth policy. We are seeing the negative repercussions of this in Greece. He is also right that capital controls were necessary (at least temporarily). Most importantly, sovereigns should not step in and assume all of the banking sector’s liabilities. Ireland has learned this the hard way

Joe Stiglitz on Quantitative Easing

Joseph Gagnon of the Peterson Institute for International Economics and Joseph Stiglitz, the Nobel Prize-winning Economics Professor from Columbia, squared off yesterday on the topic of quantitative easing. Video below. Also see my explanation of quantitative easing: How Quantitative Easing Really Works

Stiglitz: Of the 1%, By the 1%, and for the 1%

The following video talk is based on a must-read piece Professor Stiglitz wrote in Vanity Fair on inequality in the United States

Stiglitz proposes new reserve currency

This topic needs a lot more attention. And I think today’s so-called Bretton Woods II fiat system is unstable. Excess money creation and trade imbalances are secular problems that fiat currency has allowed to become destabilizing. If countries like the U.S. can create as much money as they want and run current account deficits as large as they want without any constraint, isn’t it likely that credit growth will always eventually outstrip nominal economic growth? Isn’t it equally likely that this will always lead to a destabilising financial crisis and the recrimination that global trade imbalances create? That’s my takeaway at least.

Despite Stiglitz’s efforts and the attention paid to this issue by economist Paul Davidson, I doubt we are going to get a voluntary departure from the existing monetary system. I say wait for the next crisis for reform of the monetary system. That is when the issue will be urgent and resonate more with policy makers

Why The IMF Meetings Failed

…And the Coming Capital Controls A cross-post from this past Monday by Michael Hudson, President of The Institute for the Study of Long-Term Economic Trends (ISLET), a Wall Street Financial Analyst, Distinguished Research Professor of Economics at the University of Missouri, Kansas City and author of Super-Imperialism: The Economic Strategy of American Empire (1968 &

Galbraith, Stiglitz and Soros on resisting the inevitability of the Greek debt crisis

I would love to have gone to the Institute of New Economic Thinking (INET) conference in Cambridge, but the timing was wrong for me.  The effort, sponsored by George Soros, is a much needed collaboration of ideas to help prevent a crisis like the one we are now experiencing. Marshall Auerback reported yesterday on some

Links: 2010-02-11 – Greece, snow’s effect on jobs report and more

The latest on Greece, according to Le Figaro in France, is that the EU will announce an agreement on support for Greece. In the article, Hermann van Rompuy stresses that Greece did not ask for ‘financial aide,’ whatever that means. It sounds like some sort of support will be announced after the EU summit –

Video: Stiglitz and Hendry debate the Greek bailout

Part 1 below is background and analysis   Part 2 is where Hendry and Stiglitz talk bailout with the Spanish Ambassador to the UK. Sparks do fly

It’s the debt, stupid

Let’s say I run a company. For the sake of argument, we’ll call it a shoe store in New York City. I am making $100,000 net per year now. But, I look around me and see huge opportunity for growth. So I go to my bank and ask for a loan to expand my business. 

Is economic boom around the corner?

This September 2009 post still describes my general view on the U.S. economy. If I wrote it today, I would be more bearish medium-term because it is obvious that in 2010 fiscal and monetary policy will become less supportive of recovery. Political pressures to remove fiscal and monetary stimulus are too much to bear. As a result, I give a double dip recession slightly better odds than a multi-year recovery now. But the analysis framing my thinking is largely the same

Dollar falls to lowest on year

The U.S. Dollar fell to its lowest against the Swiss Franc and Euro, while the Canadian dollar and the Scandinavian currencies are also near year highs as well.  If you read Bloomberg, you might think this has to do with a bullish equity market call as the dollar’s status as a safe haven is less

Stephen Roach: The case against Bernanke

While most economists have come out in favor of Barack Obama’s decision to re-appoint Ben Bernanke as Chairman of the Federal Reserve Board, Stephen Roach has penned an Op-Ed in today’s Financial Times which highlights the case against Bernanke. It is must reading. Roach has three main points. Before the Lehman bankruptcy, Bernanke was an