Sunday, April 6, 2014

OMG One Economist the Chinese Should Completely Ignore

Joseph Stiglitz, who was chairman of President Bill Clinton’s Council of Economic Advisers and served as senior vice president and chief economist of the World Bank, writes at Project Syndicate:

Many of China’s problems today stem from too much market and too little government.
I note he writes this as China has over 50 million empty apartments, which were constructed via government planning and a government central bank that is doing volatile stop and go money printing that is creating a massive boom-bust business cycle.

Stiglitz goes on to call for China to go beyond the U.S. in government healthcare planning, as though the current high cost of healthcare in the U.S. is not the result of government intrusions distorting the market:

America’s privately-based health-care system is expensive, inefficient, and achieves far worse outcomes than those in European countries, which spend far less. A more market-based system is not the direction in which China should be going.
Stiglitz goes on to distort the causes of the recent financial crisis,by ignoring the Federal Reserve money printing manipulations during the period, called here in real time (SEE: An Administration Keynesian Speaks of Failure, Failure and Failure (And an Alternative Examined). He, remarkably, attributes the cisis to lack of regulation:

One major lesson that should have been learned from the post-2008 global economic crisis is that markets are not self-regulating. They are prone to asset and credit bubbles, which inevitably collapse – often when cross-border capital flows abruptly reverse direction – imposing massive social costs.
America’s infatuation with deregulation was the cause of the crisis.
He concludes with these massive interventionist policy recommendations for China:
China, one hopes, will not take the route that America followed, with such disastrous consequences. The challenge for its leaders is to devise effective regulatory regimes that are appropriate for its stage of development.
The economics of success is clear: higher spending on urbanization, health care, and education, funded by increases in taxes...

I don't think I have ever seen such a massive jumble of terrible policy prescriptions in one column. Stiglitz needs to be regulated.


  1. "Many of China’s problems today stem from too much market and too little government."

    "A more market-based system is not the direction in which China should be going."

    Read the two sentences above again very slowly and let it fester in your brain. Once you do that it becomes quickly impossible to even think about it without exploding in hysterical laughter. Stigshit is either on some type of hallucinogen, is just a sellout shill to government, or he's completely stupid.

    Ok Stigshit, I will guarantee you something your PhD didn't teach you. Go move to some Communist or fascist dictatorship and completely nationalize the computer industry (if the dictator hasn't already been stupid enough to do so) then get back to me and show me how inexpensive and efficient government is at making computer equipment and software. I GUARANTEE you my challenge will make you look like dumber than a dead tree.

    Is this guy kidding? This guy majored in drugs and alcohol not economics. What an idiot!

  2. The only free market China has is at the street level. Go any higher and the the national and municipal governments are all over every transaction. While banks historically have been merely financing arms for local governments and they claim it is different now you shouldn't believe it (China always claims things are different now). The city corporations are completely insolvent and non-performing loans are everywhere. The only uncertainty now is whether the government is going to completely reorganize the banking sector for the 4th time since 1978 or force municipalities to pay off the debt by selling government assets. Otherwise those banks are screwed.

  3. One of China's "effective regulatory regimes" uses the Chinese death van, which, I have read, is sold to the government by a private firm. It could be that Stiglitz owns a few shares.

  4. Well, are you sure Stiglitz is trying to HELP China?
    Maybe he is a true nationalist and wants to give China destructive advise deliberately.
    In that case he may be a genius.

  5. Too little government? In China? Is this guy for real? If Stiglitz needs a good example of more government then maybe he should look at Venezuela and see how more government has help those people. I'm sure Venezuelans are soooooo happy about the massive food shortages going on right now.