The Roaring Nineties: A New History of the World's Most Prosperous Decade

Joseph Stiglitz, formerly Chief Economist at the World Bank, has written a fierce attack on finance capital. He warns, "what was good for Wall Street might not be - and often was not - good for the country. ... The captains of industry - the leaders to whom all Americans were told to look up to [sic], those who served as the aspiration [sic] for others - have, it turns out, acted in ways which benefited themselves at the expense of others. ... The market system had provided incentives in which by doing well for themselves they did not benefit others, but rather their gains were at the expense of those they were supposed to be working for." As he points out, "In spite of the confidence that is so often expressed in how well markets work, there is a huge body of research suggesting that many investors are simply not rational, and if that is the case, then the prices that emerge in the market may not provide good `directions' for what to invest in." This refutes capitalism's main claim, that only the market can produce a rational price system. So the market system is neither fair nor efficient. Yet the US state tries to force all other states along the same path, using the IMF, the World Bank and the World Trade Organization. Stiglitz notes, "While we talked about democracy, we did everything we could to maintain our control of the global economic system, and to make sure that it worked for our interests, or more accurately, for the financial and corporate interests that dominated this part of our national life." He sums up the US record, "the treaties that we had hailed so proudly were seen as unbalanced, [and] trade liberalization as a new way in which the rich and powerful could exploit the weak and the poor. Just as the market economy had not delivered what it had promised to the countries of the former Soviet Union - it brought unprecedented poverty, not unprecedented prosperity - trade liberalization did not deliver what it had promised. ... What a peculiar world, in which the poor countries are in effect subsidizing the richest." The nineties, like the 1920s, led to a crash. The bubble was bigger, and so was the crash. For 200 years of capitalism, boom has led to bust and as inevitably to liberal promises to create `a gentler, more humane capitalism'. As Stiglitz admits, "rather than attacking the premises, the ideology, we accepted the terms of the debate as they had been framed." We do not need reforms of this failed, destructive system; we need a new and better system.

A nice critique of Rubinomics from the worlds best liberal economist. A little dated now, but as a history of Bill Clinton's economic policy, it works well. Recommended if you want to see how things will shake out if HRC wins the nomination and general election. Pick up "Making Globalization Work" while you're at it for an insightful commentary on where we need to go from here.

All together an absolutely riveting book put together by someone who's seen it all and been there. Few academics, indeed very few, have had the ringside view as Joseph Stiglitz had, first as the Chairman of the Council of Economic Advisers from 1993 to 1997 and then Sr. Vice President and Chief Economist at the World Bank from 1997 to 200. And all this on top of a sterling academic career at places like Stanford, Princeton and Columbia which earned him a Nobel in 2001-all in all, an absolutely sterling set of credentials. The book in itself is completely riveting. I started reading it at about 9 p.m. on a lazy January evening during the holidays and could not put it down till 3 a.m. when I was finally finished. The book is structured into several different chapters, 12 in total, the first 11 of which talk about the ills that plagued the free market system in the decade of the 1990s. In the final chapter, to round it all up, he proposes a set of alternative ways and means labeling it as the "New Democratic Idealism." All the usual suspects that you would expect to find in a book critical of free markets are there such as Enron, the accounting scandals, the stock market bubble and capital account liberalization. But then there are things which you would not expect in a typical book, for instance, a fairly critical stance on the role played by the Fed, including its venerable chairman, Alan Greenspan as also a harsh scrutiny of several practices at Wall Street which involved serious conflicts of interest. Unlike his book titled "Globalization and its discontents" which for the most part, is a rant against the IMF and relates to his experiences with international economies at the World Bank, the present volume relates more to domestic politics and policies and was shaped largely by the role he played in the Clinton administration and the debates that he had with other arms of the government such as the Treasury and the Fed. Only one chapter in the book is exclusively devoted to the topic of globalization in developing economies, the heightened level of insecurity globalization breeds in these nations and how the process of globalization has to better take into account the aspirations of the disadvantaged. The book, as I have said above, is good. Not just the content, but the way it is structured, the overall readability (including but not limited to the font size) is great. However it suffers from a set of problems like his earlier book "Globalization and Its Discontents." In some ways, it mentions all the ills of the free market system without mentioning any of the redeeming features of the system which have led to a huge improvement in living standards around the world, particularly in those countries which have embraced free markets with zeal. Beyond the general criticism, some specifics would be as follows: a) Professor Stiglitz mentions that the 2001 recession was among the worst seen in the post-war period-Incorrect! The fact remains th

Only a Nobel Prize-winning economist could disguise a political broadside against conservatives and the George W. Bush administration inside a Trojan horse mea culpa of the Bill Clinton White House. No one could argue with Joseph Stiglitz's assertion that an effective modern economy must strike a reasonable balance between free markets and government oversight - but what is reasonable? Stiglitz regrets what is arguably the shining achievement of the Clinton Administration, namely, its success in balancing the U.S. budget. Credit him for consistency: he opposed Clinton's tax cut, just as he opposed George W. Bush's. Stiglitz's academic and professional chops are beyond question, and his insights into corporate welfare and inefficient markets are quite valuable if somewhat short of profound. We find that this volume provides strong insights into the inner workings of the American economic juggernaut. Your reaction will depend whether you agree or disagree with the author's contentions that the Clinton Administration was not liberal enough and that the present Bush Administration believes in small government.

It's easy to see why this book might be difficult for those from the conservative school of economics. Stiglitz - a Nobel Prize winner - is not a simple man, and neither are his ideas and theories; like economics itself, this book covers complex issues and problems that cannot be solved by a mere sweeping ideology of "taxes are bad" and "deregulation is good."While the ideas Stiglitz explores are complex, the book is nothing near an impossible or dry read - to the contrary. Stiglitz's premise is clear: While there will probably always be cycles of boom and bust, and bubbles like those of the 90s will burst, policies still matter and are important. It is policies that can help lengthen expansions and shorten recessions, and help us through cycles of boom and bust. This book is a fascinating read. It's especially terrific if you're looking for a book that links economics and policies in a cohesive, understandable way, and doesn't just speak about one at a time. Stiglitz does an excellent job of showing how the two are intimately intertwined.