Joseph Stiglitz: "unfettered markets" are to blame for the economic downturn

[georgedonnelly]

I was reading this excellent article from the Guardian about Joseph Stiglitz' study of the costs of the Iraq War: The true cost of war

In 2005, a Nobel prize-winning economist began the painstaking process of calculating the true cost of the Iraq war. In his new book, he reveals how short-sighted budget decisions, cover-ups and a war fought in bad faith will affect us all for decades to come.

Further into the article they talk about how the war has led to the economic downturn in the US and I run into this dissonant piece of junk reasoning:

So quite apart from the war, does he think a particular kind of unfettered market has had its day? "Yes. I think that anybody who believes that the banks know what they're doing has to have their head examined. Clearly, unfettered markets have led us to this economic downturn, and to enormous social problems."

What?! A leading economist demonstrates that the war and all the nonsensical decisions of governments have led us to this problem but "unfettered markets" are to blame?! I thought this classical piece of bait-and-switch reasoning had finally been run out of town on a rail. I guess not.

Anybody else find this weird? I was going to buy the book until I read that. Oh well.

Edited February 28, 2008 by George Donnelly

[Aggrad02]

I was reading this excellent article from the Guardian about Joseph Stiglitz' study of the costs of the Iraq War: The true cost of war

In 2005, a Nobel prize-winning economist began the painstaking process of calculating the true cost of the Iraq war. In his new book, he reveals how short-sighted budget decisions, cover-ups and a war fought in bad faith will affect us all for decades to come.

Further into the article they talk about how the war has led to the economic downturn in the US and I run into this dissonant piece of junk reasoning:

So quite apart from the war, does he think a particular kind of unfettered market has had its day? "Yes. I think that anybody who believes that the banks know what they're doing has to have their head examined. Clearly, unfettered markets have led us to this economic downturn, and to enormous social problems."

What?! A leading economist demonstrates that the war and all the nonsensical decisions of governments have led us to this problem but "unfettered markets" are to blame?! I thought this classical piece of bait-and-switch reasoning had finally been run out of town on a rail. I guess not.

Anybody else find this weird? I was going to buy the book until I read that. Oh well.

Well I would say that he is right but does not see the problem clearly. The banks that he is talking about are the Federal Reserve and European Central Bank. Their policy of printing money and destroying the currency is a major factor in this down turn. But I guess what he not taking into consideration is that the banks (The Fed or European Central Bank) are created as monopolies by the government they are not unfettered. If we had unfettered banks then we would not have huge centralized banks controlled by the government that create money backed by nothing and the solution would be to go back to a commodities based currency.

Now if he does understand the problem, then he considers unfettered as free from overt Government regulation. I guess he wants the Congress or the EU to set interest rates and give home loans. Which is more collectivist propaganda.

-Dustan