To Cure the Economy

[Jefferson23]

Joseph Stiglitz

2011-10-03


NEW YORK – As the economic slump that began in 2007 persists, the question on everyone’s minds is obvious: Why? Unless we have a better understanding of the causes of the crisis, we can’t implement an effective recovery strategy. And, so far, we have neither.

We were told that this was a financial crisis, so governments on both sides of the Atlantic focused on the banks. Stimulus programs were sold as being a temporary palliative, needed to bridge the gap until the financial sector recovered and private lending resumed. But, while bank profitability and bonuses have returned, lending has not recovered, despite record-low long- and short-term interest rates.

The banks claim that lending remains constrained by a shortage of creditworthy borrowers, owing to the sick economy. And key data indicate that they are at least partly right. After all, large enterprises are sitting on a few trillion dollars in cash, so money is not what is holding them back from investing and hiring. Some, perhaps many, small businesses are, however, in a very different position; strapped for funds, they can’t grow, and many are being forced to contract.

Still, overall, business investment – excluding construction – has returned to 10% of GDP (from 10.6% before the crisis). With so much excess capacity in real estate, confidence will not recover to its pre-crisis level anytime soon, regardless of what is done to the banking sector.

in full: http://www.project-syndicate.org/commentary/stiglitz143/English

[Taverner]

1. We need a huge public works project. Something that rivals the New Deal.

The New Deal hired musicians, artists, playwrights, photographers, statisticians, scientists, physicists, farmers, etc.....

[Amonester]

2. Instead of going from one bubble crisis to the next, why not try this:

#1 - End corporate welfare (which includes all tax-monies given to golden-parachute's CEOs of oil, mic, etc. corporations).

#2 - Use most of the tax-money saved by the #1 above to pass and implement a true Public Campaign Funding Act that outlaws all bribes to all politicians.

#3 - Direct the FCC to cancel all current licenses to all mass-media outlets at a pre-determined date, then issue NEW licenses that will include FREE airwave allotments to all official (and then "bribes free") political parties, on verifiable schedules.

#4 - End all foreign occupations by U.S. Troops and bring them all back home before, for example, the end of 2013. (Or 2012, if logistically possible.)

#5 - Medicare for all (tax the plutocRat$ back at 1960's levels, and outlaw any fiscal evasion to any fiscal paradise).

#6 - Eliminate the SS cap (and don't do anything else).

#7 - Open the doors to a free education for all.

AND lots, and lots of other important stuff for the 21st century...

Of course, this would require super-majorities (in the range of 80%-20%) in both chambers of Congress... and a president who COULD (or just, at best, WOULD...) NOT veto any of such legislations.