Why You Want a Progressive to Be Running the Economy

[Dover]

Why You Want a Progressive to Be Running the Economy
By Joseph Stiglitz, The Guardian. Posted August 11, 2008.


Unlike the GOP, progressives have a coherent economic agenda offering not only higher growth, but also social justice.


Both the left and the right say they stand for economic growth. So should voters trying to decide between the two simply look at it as a matter of choosing alternative management teams?

If only matters were so easy! Part of the problem concerns the role of luck. America's economy was blessed in the 1990s with low energy prices, a high pace of innovation, and a China increasingly offering high-quality goods at decreasing prices, all of which combined to produce low inflation and rapid growth.

President Clinton and then-chairman of the US Federal Reserve, Alan Greenspan, deserve little credit for this--though, to be sure, bad policies could have messed things up. By contrast, the problems faced today --high energy and food prices and a crumbling financial system --have, to a large extent, been brought about by bad policies.

There are, indeed, big differences in growth strategies, which make different outcomes highly likely. The first difference concerns how growth itself is conceived. Growth is not just a matter of increasing GDP. It must be sustainable: growth based on environmental degradation, a debt-financed consumption binge, or the exploitation of scarce natural resources, without reinvesting the proceeds, is not sustainable....>

http://www.alternet.org/workplace/94548/why_you_want_a_progressive_to_be_running_the_economy/


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Those Weren't the Days?


Clinton economist Joseph E. Stiglitz ponders his legacy.

By: Mike HofmanPublished October 2003

The economy flourished in the 1990s, but former Clinton adviser Joseph E. Stiglitz suggests that business leaders and policymakers supported or allowed changes in the economy--bank consolidation, rampant deregulation, lax accounting--that are now hindering entrepreneurs. He makes his case in The Roaring Nineties, due out next month. The 2001 Nobel laureate recently spoke with Inc. senior editor Mike Hofman.

You write that one of the worst developments for entrepreneurs in the '90s was bank consolidation. Why?

Historically, the U.S. essentially mandated that there be different banks in different states we wanted a flow of funds to small and medium-size enterprises. If we had a banking system dominated by a few big national banks, the worry was that the flow of funds would be diverted to a few big national enterprises. It's not a deep idea, but it has profound consequences.

But as one of Clinton's advisers, surely you supported some deregulation?

The problem was that deregulation became the mantra. Instead, we should have been looking for the right regulatory framework for industries that were changing rapidly because of technology and other factors. In some cases, we got the balance wrong because the world was changing quickly. In others, people were just acting in the commercial interest.

Do small-business concerns factor in the government's economic agenda?

Small business can be ignored, and it's a problem. Look at the secretaries of the Treasury under Bush--the heads of a railroad and a major global aluminum company. Of course, under Clinton, was for a long time the former head of Goldman Sachs--and the clients of Goldman Sachs are not the small businesses of the world either. But I think Democrats were more sensitive in trying to deal with small business. The Small Business Administration was very strongly nurtured under Clinton.

In what tangible ways does the big-business bias affect small companies?...>

http://www.inc.com/magazine/20031001/boom.html

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Wikipedia: Joseph Stiglitz
http://en.wikipedia.org/wiki/Joseph_E._Stiglitz

[Dover]

1. Now that we know Stiglitz is one of Obama's advisers, I thought it was time to reread this..n/t

[Dover]

2. From the article -

...The right often traces its intellectual parentage to Adam Smith, but while Smith recognized the power of markets, he also recognized their limits. Even in his era, businesses found that they could increase profits more easily by conspiring to raise prices than by producing innovative products more efficiently. There is a need for strong anti-trust laws.