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Sunday, August 15, 2010

The Crisis Down-Under - Joseph Stiglitz

Above: Renowned Economist, Joseph Stiglitz

In this article Joseph Stiglitz praises the efforts of the Australian Labor government in warding away recession as a consequence of the Global Financial Crisis. (GFC)   Stiglitz is one of the most respected economists in the world; and his endorsement ought mean a lot for Australian voters considering economic management as a key issue in deciding their vote.

With permission I am linking to this article.  After an introductoruy excerpt I am providing a link to the full version at pre-eminent opinion website 'Project Syndicate'.  'Project Syndicate' owns copyright rights to the article.  For permission in reproducing this article write to:  distribution@project-syndicate.org.

Although not given permission to reproduce the article in full, I believe is it critical to 'get the message out': the Liberals' fear campaign on debt and spending is deceptive to the core.  Their policies would have seen Australia into recession.  I encourage readers to follow the link at the bottom of this excerpt to have access to the full version.


CANBERRA – The Great Recession of 2008 reached the farthest corners of the earth. Here in Australia, they refer to it as the GFC – the global financial crisis.

Kevin Rudd, who was prime minister when the crisis struck, put in place one of the best-designed Keynesian stimulus packages of any country in the world. He realized that it was important to act early, with money that would be spent quickly, but that there was a risk that the crisis would not be over soon. So the first part of the stimulus was cash grants, followed by investments, which would take longer to put into place.

Rudd’s stimulus worked: Australia had the shortest and shallowest of recessions of the advanced industrial countries. But, ironically, attention has focused on the fact that some of the investment money was not spent as well as it might have been, and on the fiscal deficit that the downturn and the government’s response created...
 
For the rest of this article follow the URL below!
 
http://www.project-syndicate.org/commentary/stiglitz128/English
 
nb: Joseph E. Stiglitz is University Professor at Columbia University and a Nobel laureate in Economics. His latest book, Freefall: Free Markets and the Sinking of the Global Economy, is now available in French, German, Japanese, and Spanish.

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4 comments:

  1. To my way of looking at it, Stiglitz is arguing that the ruling class should endorse those of its representatives in the government who took steps to pour representations of wealth (money) into projects which resulted in 'job creation' thus, fending off unemployment. Unemployment is a drag on 'the economy' because it means less is being produced and is able to be consumed. A downward spiral ensues from this paradigm and the capitalist system suffers. Capitalism actually does better when workers are employed making wealth and consuming part of the wealth which isn't being exported. This makes other capitalists happy as well--they get to export the excess wealth to markets where unemployment, thus spending remains steady and stable. Steady and stable is what Capital needs to grow.

    The conservatives, on the other hand, think stimulus spending is wasteful and debt burdening. Stiglitz says they're wrong headed. Stiglitz is right about this. Nobody wins during a Great Depression.

    ReplyDelete
  2. According to this paper http://www.socialpolicyconnections.com. ... ch2010.pdf Australia's foreign debt is not so much that of which our government generated, but rather from our private sector...namely the major banks! While debt generated by the government to shield us from the GFC was for our benefit, I can't say the same for that generated by the banks...who incidentally made huge profits along with the generation of huge foreign debt! Both major parties should look at regulating the banking industry again imho!

    ReplyDelete
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