Joe Stiglitz: Why the world economy's malaise continues
Mike Weaver
mike.weaver at zen.co.uk
Thu Jan 14 18:52:05 CST 2016
I thought it was satire. It isn't though. It is a perfectly rational
take on matters from a strictly capitalist point of view, from the point
of a corporate share holder for whom all factors in the economy are but
functions in an equation whose outcome is the maximisation of their income.
The prices of digital home appliances may be going down, but the cost of
housing, health, education and other essentials aren't.
It's a different equation we need.
On 15/01/2016 00:19, David Morris wrote:
> 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
>>
>> 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
>>
>>
>>
>>
>>
>>
>>
>>
>>
>>
>>
>
>
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