Joe Stiglitz: Why the world economy's malaise continues

Fri Jan 15 12:50:17 CST 2016

I respectfully withdraw from the discussion; I can't go round on this one
more time, sorry.

On Fri, Jan 15, 2016 at 9:54 AM, Robert Mahnke <rpmahnke at gmail.com> wrote:

> If what you're talking about is what's in that Japan Times piece, it's
> nonsense. If not, you haven't tried to explain.
>
> It's easy to explain where the shortfall in demand came from: the shock in
> 2007. Demand has never recovered. If you want to say we have too much
> supply, you need to explain how that could be. One can do this in a
> particular sector (say, cars or housing). But what's your story about the
> global economy?
>
> Sent from an iPhone; pls xcse typos.
>
> On Jan 14, 2016, at 23:28, ish mailian <ishmailian at gmail.com> wrote:
>
> 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
>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>
>>>>>>>>>>>>>
>>>>>>>>>>>>
>>>>>>>>>>>
>>>>>>>>>>
>>>>>>>>>
>>>>>>>>
>>>>>>>
>>>>>>>
>>>>>>
>>>>>
>>>
>>
>
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