Joe Stiglitz: Why the world economy's malaise continues

Fri Jan 15 01:28:38 CST 2016

Krugman is shooting away at his favorite target, the idiots on the Right
who argue, mostly from some puritan ideology and not from any economic
theory, that belt tightening is the best way to feed the poor. Though he
sets his favorite theory against their favorite theory, the piece is not
economics but politics.

And, while he is absolutely correct, his piece has nothing to do with what
I am talking about.

On Fri, Jan 15, 2016 at 2:06 AM, ish mailian <ishmailian at gmail.com> wrote:

> Yeah, he's right about the war on demand, but I'm not talking about that.
>
>
>
> On Thu, Jan 14, 2016 at 8:02 PM, Robert Mahnke <rpmahnke at gmail.com> wrote:
>
>> It's a little dated, but this post is still quite relevant, apparently:
>>
>> http://krugman.blogs.nytimes.com/2011/01/24/the-war-on-demand/
>>
>> On Thu, Jan 14, 2016 at 4:19 PM, David Morris <fqmorris at gmail.com> 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> 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
>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>
>>>>>>>>>>>>>
>>>>>>>>>>>>
>>>>>>>>>>>
>>>>>>>>>>
>>>>>>>>>
>>>>>>>>
>>>>>>>
>>>>>>
>>>>>>
>>>>>
>>>>
>>
>
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://waste.org/pipermail/pynchon-l/attachments/20160115/263a51b9/attachment.html>