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Joseph Stiglitz Was Right: Suicide

It’s a rare man that is recognized for his achievements during his own lifetime. Normally, the geniuses of the world have to wait until they are dead to get any sort of recognition, let alone strike it rich. We never like giving recognition to people as it makes our own status decrease.

Except, that’s more of a thing of the past, isn’t it? Our super-fast world at the press of a button and at our fingertips means that we no longer have the possibility of putting that off until the ones with the knowledge are forgotten bywords of a bygone era. It happens here and now, these days.

Joseph Eugene Stiglitz was awarded the Nobel Prize in Economic Sciences in 2001. We have constructed the world in which we live on recognition and awards. But, they are just for giving. They are not for anything else. We take no heed of what the ones that have been recognized might have to say or declare. They can go blue in their face, we have delusions of grandeur. Who gave them the prize anyhow?

In 2012, talking of the European Union’s austerity plans, Stiglitz had just one word to say. It was “suicide-pact”. He went on to say last year that imposing austerity on the citizens of the EU would do nothing more than lead to the collapse of the economies of those very same countries. Nobody listened to him then and nobody is listening to those words now. Politicians today in the EU are so hell-bent on retaining power that they have transformed themselves into economists, without any ability or reason. Politics is the governing element that will lead to the downfall of our economic structures because we are governed by flawed responses from people that have no idea what economics is about.

Isn’t it Keynesian economics that shows that austerity can only be put in place when the economy is on an upper? Didn’t Keynes say: “The boom, not the slump, is the right time for austerity at the Treasury"? Haven’t they learnt that a country was nothing like running a household? Margaret Thatcher got it all wrong. If we all reduce our budgets and we all stop spending at the same time, then where’s the money going to come from? Is it going to magic somehow out of the magician’s hat? Undoubtedly, it will disappear down the rabbit hole along with the white rabbit that Alice chased after. Chasing white rabbits, that’s what we’re doing.

Cutting our spending all at the same time can only bring about the paradox of thrift. Some may criticize it and say it’s not true. But, in order for their arguments to hold up, we would have to export our way out of the recession and that we are not doing today. It would also have to be done at the same time as currency devaluation. That we are definitely not doing…we just know how to put the modern technology that we have created to good use: printing new shiny notes and throwing them at the people.

Take the example of the UK. The British believe that they export more to the EU than they import. They don’t believe the figures that show the contrary. That’s because they are living on the lies that their politicians have constructed. In March (and this is just one example, but the past is just as true) 2013, the difference between the value of goods imported by the UK and the value of the goods exported stood at $6.1 billion. The UK has a trade deficit that is growing (March: an increase of 31.8%). Will this help the UK export itself out of their recession? Hope against hope, we might pull it off. But, the paradox of thrift has been around since the 18th century when Bernard Mandeville (another guy that has been forgotten) wrote The Fable of the Bees. But, the bees are disappearing too, aren’t they these days?

The EU is in a slump, austerity can only bring us down. Yet, the politicians that we have voted into power seem to believe that its austerity, contrary to what the past has shown us; that will get us out of that rut.

We have spent decades, even centuries, wishing for others to follow in our footsteps and create what we have built our societies upon. Now, they are on the cusp, on the verge of doing it and succeeding possibly even better than we were able to do in the US and the EU, we are floored. We are telling them that they are wrong.

But, Stiglitz was right; we have signed a suicide-pact. We have decided that we need to destroy everything and start again. That’s what normally happens when those that are lagging behind finally catch up with us, we change the boundaries, so they are lagging behind again. But, this time, it’s our own death that will come about. Our economies will die. The politicians are not economists. They can’t tell us what will happen and what bright new future they will construct. But, they are the ones that are the apprentice-sorcerers that are waving the wands, dressed in economists’ clothes.

About tothetick

Professional team of writers/analysts analyzing the financial markets.

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10 Responses to Joseph Stiglitz Was Right: Suicide

  1. Mike June 4, 2013 at 7:45 am #

    Austerity is a nice way of saying we're going to rob you blind. It means, you're going to pay more taxes for less in return. It goes without saying that our "elected" masters will sacrifice nothing.

    People need to wake up and realize the government and politicians are not your friend. They don't care about you or your well being. You are a human resource, to be used until every drop of worth has been extracted from you. Remember that the next time they propose a new scheme for your "benefit".

    • SueQ September 4, 2013 at 5:18 pm #

      Look up definition of "sociopath".
      'Nuff said?

  2. DaveP June 11, 2013 at 7:35 pm #

    Stiglitz is correct in stating that the boomtimes are times for austerity and repaying the debts incurred during the slump.
    But what happens when in the last boom cycle, austerity and debt repayment was not applied, instead a credit fuelled economic expansion?
    That expansion fuelled asset bubbles and ruinous foreign wars and other malinvestments. What now as the cycle turns down?
    More credit, lower taxes, bubble creation and malinvestment?

    It seems to me that the old rules no longer apply.. austerity won't help and neither will stimulus.. Looks like western economies have an appointment with a brick wall.

  3. MK August 17, 2013 at 11:50 am #

    I've been writing about how stupid our current economic policies of FREE TRADE, FREE MARKET, PRIVATIZATION AND AUSTERITY are for over a decade. I have held these beliefs since before NAFTA which I firmly opposed. NAFTA caused exactly what I told people that it would. Ross Perot was absolutely correct. Now, we have a country with no jobs, many poor people that the world still thinks has an internal market and wants to exploit. WELLL, WE DON'T. THINGS ARE GETTING VERY ROUGH IN THE USA despite all the lies.

    ANY HOPES THAT THE CLOWNS IN CONGRESS HAVE FOR A GRAND RESCUE BY NATURE, OFFWORLDERS OR ANY OTHER MEANS ARE PIPE DREAMS. Their belief that they can control the American populace of 311 million with a military of force of 6 to 10 million most of whom will be out of shape, hyper aggressive police and desk jockeys (or overseas) is just another pipe dream from men who have never served.

    WE NEED TO CHANGE OUR POLICIES, REBUILD THE INFRASTRUCTURE THAT GEORGE WH BUSH GAVE AWAY AND BRING BACK OUR MANUFACTURING TO SOLVE PROBLEMS LIKE SUSTAINABILITY.
    WE ALSO NEED TO DO AWAY WITH ALL THE STUPID FREE TRADE POLICIES.

  4. Berourke August 18, 2013 at 11:17 am #

    Are you calling what we have now austerity? Very curious as budgets aren't smaller.

    I have as yet to hear an economist explain how everyone pursuing their own perceived interests doesn't lead to a giant government dedicated to taxing everyone to maintain "my" lifestyle. Add in the press slanting information to support their desires and we end up in the mess we are in. This has been predicted by commentators since Tocqueville, the surprise is that it has taken so long.

    It all seems like a smokescreen to hide what is really happening, which is hundreds of billions borrowed to prop up Banksters and continue the royal lifestyle of our rulers.

    I laugh at the press repeating Obama's attacks on the republicans for "not caring about the poor" while he flies off on vacations in his personal 747. The $70 million he spent on his recent "visit" to Africa would have gone a long way to helping Detroit, but somehow it is the white republicans that won't give up their country club lifestyle that is keeping Detroit down.

    • SueQ September 4, 2013 at 5:22 pm #

      Well said Berourke.

    • Catalog 33 September 8, 2013 at 7:02 pm #

      Gee, it's those nasty old White Repubs that brought Detroit down ?? I hate Republicans, but you can't pin the tail on that Elephant - not even the Marxist Demo's - it;s all in the genetics, my friend, Sub Saharan IQ's go nowhere but down.

    • Tom September 17, 2013 at 9:23 am #

      Thanks for your great resonse Berourke. I was starting to wonder if anyone on here noticed the same (that budgets keep increasing)? Good to see that some are still able to think critically.

  5. Tall Tom September 17, 2013 at 10:54 am #

    Just remember...

    You are only "Gainfully Employed" if the Government can extract a gain from you.

    You are nothing more than a Human Resource. Do you really think that these labels have no real meaning?

    So shut up and get back to work. Your Government depends on you.

    And you just thought it is about you? Wow. Your Government is disappointed in your petty narcissism.

  6. highpockets September 21, 2013 at 7:00 pm #

    There is no prize for Economics given by the Nobel system.

    The award is given by Sveriges Riksbank (Sweden's central bank) established the Prize in Economic Sciences in Memory of Alfred Nobeby .

    Which proves once again that economists lie about everything.

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