Joe Stiglitz: Why the world economy's malaise continues

Thu Jan 14 18:19:50 CST 2016

That's what I thought.  A very biased author without a story, confusing
everything in order to attack excess debt.

Thanks,
David Morris

On Thursday, January 14, 2016, Robert Mahnke <rpmahnke at gmail.com
<javascript:_e(%7B%7D,'cvml','rpmahnke at gmail.com');>> wrote:

> That piece (the Japan Times op-ed from 2012) is gobbledegook.  In the
> right circumstances, it makes a lot of sense to talk about a bubble
> creating over investment in certain areas, leading to an excess of supply
> over what a market in equilibrium (not a bubble) will demand.  Arguably,
> you have had this situation in the auto industry, where national
> governments subsidize their own makers. But to say that this is happening
> across the global economy is nonsense, a slick label without a story behind
> it.
>
> The author says there is "excess labor"?  What does that mean?  Too many
> people have been born?  Persuaded to enter the economy instead of loafing
> in unemployment.  You have high unemployment because there aren't enough
> jobs, which is to say there is insufficient demand for the labor we have.
>
> The author also talks about excess capacity.  How does he know the problem
> is excess capacity instead of absent demand?  "Prices of digital home
> appliances are going down at an accelerating speed, and a new model is sold
> at a 50 percent discount within six months of its launch. This is proof
> that the global economy is in excess supply."  If you think that's proof of
> anything other than sloppy thinking, I have a bridge to sell you.
>
> His third problem is excess debt, and there the reason for this piece is
> clear.  The author is hostile to fiscal stimulus, and clearly has reasoned
> backwards to attack the case for it.  The case for stimulus, and what we
> could do about the secular stagnation, can be another conversation, but the
> only way to read this piece and to think that it rebuts what Stieglitz
> wrote is to have started with that as a belief and to have searched for
> confirmation.
>
> On Thu, Jan 14, 2016 at 3:19 PM, ish mailian <ishmailian at gmail.com> wrote:
>
>> Maybe this will help?
>>
>>
>> http://www.japantimes.co.jp/news/2012/11/05/business/excess-supply-not-lack-of-demand-weighing-on-the-global-economy/#.VpganfkrIb1
>>
>> On Thu, Jan 14, 2016 at 5:41 PM, Mike Weaver <mike.weaver at zen.co.uk>
>> wrote:
>>
>>> It's not really about production, it's about distribution.
>>>
>>> On 14/01/2016 22:12, David Morris wrote:
>>>
>>> Does the article say deceased demand isn't the cause of over supply?
>>> Since I can't read it...
>>>
>>> David Morris
>>>
>>> On Thu, Jan 14, 2016 at 4:08 PM, ish mailian <ishmailian at gmail.com>
>>> wrote:
>>>
>>>> OK, but if demand is not declining, the price level is not increasing,
>>>> the story is supply. That's the story, Gerry.
>>>>
>>>> On Thu, Jan 14, 2016 at 4:59 PM, David Morris <fqmorris at gmail.com>
>>>> wrote:
>>>>
>>>>> Lack of demand is one of the basic causes of over-supply (glut), and
>>>>> that lack of demand might be caused by any number of things, like lack of
>>>>> money (liquidity). Overproduction (exceeding demand) might be another
>>>>> cause.  Cheap money would not be one of its causes.
>>>>>
>>>>> David Morris
>>>>>
>>>>> On Thu, Jan 14, 2016 at 3:42 PM, Robert Mahnke <rpmahnke at gmail.com>
>>>>> wrote:
>>>>>
>>>>>> When demand exceed supply, how do you distinguish between "a supply
>>>>>> story" and a demand story?
>>>>>>
>>>>>> On Thu, Jan 14, 2016 at 1:31 PM, ish mailian <ishmailian at gmail.com>
>>>>>> wrote:
>>>>>>
>>>>>>> Sorry about that; I thought it was a free article. It's an excellent
>>>>>>> article. And yes, it is focused on China, but the overproduction is not
>>>>>>> just a China story.
>>>>>>>
>>>>>>> The super capacity that was built to meet the expected super demand
>>>>>>> of the developing and emerging growth economies, in China and elsewhere, is
>>>>>>> the story, a supply story.
>>>>>>>
>>>>>>> On Thu, Jan 14, 2016 at 4:07 PM, David Morris <fqmorris at gmail.com>
>>>>>>> wrote:
>>>>>>>
>>>>>>>> This article is behind a paywall, but if the first two sentences
>>>>>>>> portend its content, then it seems to be saying that a glut of Chinese
>>>>>>>> goods is slowing growth.  More demand would be the solution to this
>>>>>>>> problem.  Lack of demand is its cause.
>>>>>>>>
>>>>>>>> David Morris
>>>>>>>>
>>>>>>>> On Thu, Jan 14, 2016 at 2:56 PM, ish mailian <ishmailian at gmail.com>
>>>>>>>> wrote:
>>>>>>>>
>>>>>>>>> Because it's true.
>>>>>>>>>
>>>>>>>>>
>>>>>>>>> <http://www.wsj.com/articles/glut-of-chinese-goods-pinches-global-economy-1433212681>
>>>>>>>>> http://www.wsj.com/articles/glut-of-chinese-goods-pinches-global-economy-1433212681
>>>>>>>>>
>>>>>>>>> On Thu, Jan 14, 2016 at 3:49 PM, Robert Mahnke <rpmahnke at gmail.com
>>>>>>>>> > wrote:
>>>>>>>>>
>>>>>>>>>> Why do you say that?
>>>>>>>>>>
>>>>>>>>>> On Thu, Jan 14, 2016 at 12:37 PM, ish mailian <
>>>>>>>>>> ishmailian at gmail.com> wrote:
>>>>>>>>>>
>>>>>>>>>>> The world is not not suffering from too little demand but with
>>>>>>>>>>> too much supply and with too much capacity.
>>>>>>>>>>>
>>>>>>>>>>>
>>>>>>>>>>>
>>>>>>>>>>>
>>>>>>>>>>>
>>>>>>>>>>>
>>>>>>>>>>>
>>>>>>>>>>>
>>>>>>>>>>> On Thu, Jan 14, 2016 at 3:00 PM, David Morris <
>>>>>>>>>>> fqmorris at gmail.com> wrote:
>>>>>>>>>>>
>>>>>>>>>>>> The economics of this inertia is easy to understand, and there
>>>>>>>>>>>> are readily available remedies. The world faces a deficiency of aggregate
>>>>>>>>>>>> demand, brought on by a combination of growing inequality and a mindless
>>>>>>>>>>>> wave of fiscal austerity. Those at the top spend far less than those at the
>>>>>>>>>>>> bottom, so that as money moves up, demand goes down. And countries like
>>>>>>>>>>>> Germany that consistently maintain external surpluses are contributing
>>>>>>>>>>>> significantly to the key problem of insufficient global demand.
>>>>>>>>>>>>
>>>>>>>>>>>> At the same time, the U.S. suffers from a milder form of the
>>>>>>>>>>>> fiscal austerity prevailing in Europe. Indeed, some 500,000
>>>>>>>>>>>> <http://thinkprogress.org/yglesias/2011/07/08/263588/the-conservative-recovery-continues-2/> fewer
>>>>>>>>>>>> people are employed by the public sector in the U.S. than before the
>>>>>>>>>>>> crisis. With normal expansion in government employment since 2008, there
>>>>>>>>>>>> would have been two million more.
>>>>>>>>>>>>
>>>>>>>>>>>> On Thu, Jan 14, 2016 at 1:39 PM, Robert Mahnke <
>>>>>>>>>>>> rpmahnke at gmail.com> wrote:
>>>>>>>>>>>>
>>>>>>>>>>>>>
>>>>>>>>>>>>>
>>>>>>>>>>>>> <http://www.huffingtonpost.com/joseph-e-stiglitz/world-economy-2016_b_8908560.html?utm_hp_ref=world>
>>>>>>>>>>>>> http://www.huffingtonpost.com/joseph-e-stiglitz/world-economy-2016_b_8908560.html?utm_hp_ref=world
>>>>>>>>>>>>>
>>>>>>>>>>>>>
>>>>>>>>>>>>>
>>>>>>>>>>>>
>>>>>>>>>>>>
>>>>>>>>>>>
>>>>>>>>>>
>>>>>>>>>
>>>>>>>>
>>>>>>>
>>>>>>
>>>>>
>>>>
>>>
>>>
>>
>
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