- js reader version
- view hidden posts
- tags and related articles
by Joseph Stiglitz
Wednesday, Sep. 03, 2008 at 10:40 AM
The trickle-down economy does not function. The left understands the market and rhe role the market can and should play in the economy. The right doesn't understand either. The Bush administration is nothing but the old corporatism in a new garment.
GROWTH AND SOCIAL JUSTICE
By Joseph Stiglitz
Under rightwing leadership, the economic situation of most Americans has worsened in the last seven years. Whoever seeks a sound strategy for more growth and social justice must elect democrats
[Joseph Stiglitz teaches at Columbia University in New York and is the winner of a Nobel Prize for economics. This commentary published in: The Financial Times of Germany, 8/27/2008 is translated from the German on the World Wide Web, http://www.ftd.de/meinung/kommentare/406175.html?mode=print.]
Both America’s left and right say they are for economic growth. How should the voters decide? Should they see this as only choosing between different management teams?
Oh, if only it were so simple! In the 1990s, the US economy profited from cheap energy and high-speed innovations. China increasingly supplied top-flight goods at ever-lower prices. All this led to low inflation and rapid growth in the US. Former democratic president Bill Clinton and Alan Greenspan, head of the Federal Reserve, really don’t deserve commendation. Bad policy has led to a mess. The problems we battle today – including high energy- and food prices and a weak financial system – can largely be referred back to a misguided policy.
Great differences exist between the growth strategies of the right and the left, which produce different results. The greatest difference is how growth is seen. Increased gross domestic product is not the only imperative. Growth must be sound and stable and not based on environmental destruction, debt-financed consumer intoxication or exploitation of scarce resources.
CORPORATISM IN A NEW GARMENT
Growth must be extensive and a majority of the citizens must profit from it. The trickle-down economy does not function because increased efficiency can worsen conditions for most citizens. America’s growth was neither economically sound nor extensive. Most Americans are worse off today than seven years ago.
Equality and growth do not exclude each other. Governments can promote growth by integrating more people. People are the most valuable resource of a country. Therefore guaranteeing everyone’s potential is vital. This requires education possibilities for everyone. However a modern economy also demands readiness for risks. People take risks when a good security net exists. If promoting the solidarity of society is lacking, additional costs can arise for protecting property and imprisoning criminals.
A second great distinction between the left and the right is the role of the state in economic development. In the left’s opinion, the government has a central role in providing infrastructure and education, developing technology and even acting as an entrepreneur. So the government created the foundations for the Internet and modern biotechnology.
The last distinction may seem strange. The left understands the market and the role the market can and should play in the economy. The right above all in the US doesn’t understand either. The new right embodied in the Bush administration is nothing but the old corporatism in a new garment. The Bush administration is not liberal. It believes in a strong state with stable executive authority. However this state is used to defend established interests without rightly respecting the principles of the market.
In contrast, the left tries to make the markets function. Markets left to themselves do not run well as the financial crises proves. Advocates of markets admit markets can fail, sometimes even catastrophically. But they insist markets correct themselves within an acceptable time frame. No government can sit idle when the country skids into a recession – even when this is triggered by the boundless greed of bankers. When the government assumes the hospital costs of the economy, it must also slow these costs.
THE POWER OF THE MARKET IS LIMITED
The right often counts Adam Smith as one of its intellectual fathers. While Smith knew the power of the market, he also knew the limits of this power. In his time it was clear to businesses that profits rose faster through price agreements than through more efficient production of innovative products. Therefore a new anti-trust law is necessary.
Giving a party is simple. For a certain time, everyone can have fun. Championing sound stable growth is hard. Unlike the right, the left has a positive agenda, an agenda offering social justice and not only more growth. The election in November should be easy for voters in the US.
Report this post as:
OUR HOUSE Grief Support Center Presents Night for Hope
Marshall Tuck’s racist dog whistle
Marshall Tuck’s ethnocentrism contradicts Californian values
Debunking Some Anti-Prop 10 Propaganda
Why Should California Choose De Leon Over Feinstein?
Change Links September 2018 posted
More Scandals Rock Southern California Nuke Plant San Onofre
Site Outage Friday
Change Links August 2018
Setback for Developer of SC Farm Land
More problems at Shutdown San Onofre Nuke
Change Links 2018 July posted
More Pix: "Families Belong Together," Pasadena
"Families Belong Together" March, Pasadena
Short Report on the Families Belong Together Protest in Los Angeles
Summer 2018 National Immigrant Solidarity Network News Alert!
Watch the Debate: Excluded Candidates for Governor of California
Change Links June 2018 posted
The Montrose Peace Vigil at 12 Years
Unity Archive Project
More Local News...
Allo, quelqu'un ? Allo, quelqu'une ?
deral Government Officials are not allowed to take leaflets nor pick up items in privste
Communist Mouthwash Hides Nature of Nations Suffering in Comm Pyramids Ploys
Atlanta: metro Pillage, Poison Gas, Pricks
Atlanta Metro Suffers Under Pillage, Shame lso Political Poison Gases
Fed Says College Students Have More Debt than Previous Generations
Paraphysique de l'insurrection et de l'émeute
Corruption of USA government
"We live in a time of radical counter-enlightenment"
Did Woolsey Fire Cause Radioactive Fallout?
G20 Discusses Preventing Financial Crisis and Small Island Economies
Driver near Campbell San Jose researches Bus Traffic from Northern Mexico
The Death of Small Businesses in Big Cities, Explained
Felons Shw Ninjasred Heavy Truck Tyres
Paraphysique de la consommation/pollution
Paraphysique de l'effet spectateur
Condominium, terrorisme du capital
Debt and Tax Policies Needed to Prevent Crisis Says Finance Watchdog Group
Independent Media Crackdown and Global Social Movements
Abécédaire du fascisme restreint et général
“Animaniacs in Concert!” Starring Voice Legend Rob Paulsen Heads to Portland, Oregon
Socialism in American English
Noske, noskisme réactualisé
Oprah Please Stop Selling Dead Animal Pieces
Down In Smoke SF
Paraphysique du scientisme
USDA Withholds Names Of Turkey Companies Spreading Salmonella
More Breaking News...