In the U.S., you couldn't have job creation with interest rates of 30 or 40 percent. They had a philosophy that said job creation was automatic. I wish it were true. Just a short while after hearing, from the same preachers, sermons about how globalization and opening up capital markets would bring them unprecedented growth, workers were asked to listen to sermons about "bearing pain." Wages began falling 20 to 30 percent, and unemployment went up by a factor of two, three, four, or ten.
Joseph StiglitzIn a globally integrated economy, the biggest challenge is to make sure there is adequate global aggregate demand, achieved through spending, when countries like China feel they must save high levels of dollar reserves to protect against international currency volatility.
Joseph StiglitzInternational lending banks need to focus on areas where private investment doesn't go, such as infrastructure projects, education and poverty relief.
Joseph StiglitzCountries were told they had no incentives because of social ownership. The solution was privatization and profit, profit, profit. Privatization would replace inefficient state ownership, and the profit system plus the huge defense cutbacks would let them take existing resources and an increase in consumption. Worries about distribution and competition or even concerns about democratic processes being undermined by excessive concentration of wealth could be addressed later.
Joseph StiglitzI went to Amherst because my brother had gone there before me, and he went there because his guidance counselor thought that we would do better there than at a large university like Harvard.
Joseph StiglitzThe analysis in the era of Ronald Reagan and Margaret Thatcher was that government was interfering with the efficiency of the economy through protectionism, government subsidies, and government ownership. Once the government "got out of the way," private markets would allocate resources efficiently and generate robust growth. Development would simply come.
Joseph Stiglitz