Joseph Stiglitz on Saving Capitalism

Wednesday, October 22, 2008

Is the current financial crisis a threat to American capitalism as we know it? Leonard talks to Nobel Prize-winning economist Joseph Stiglitz and economist Michael Hudson. Both are contributors to the "How to Save Capitalism" forum in the current Nov. issue of Harper's magazine.


Michael Hudson and Joseph Stiglitz

Comments [18]


Commentary from the lower right corner of this comic strip:

"Failure to distinguish between "growth" and "capital gains" is, neatly put, just what got [some of] us into this mess!

Oct. 23 2008 06:29 PM

Number 2 -- i'm guessing he means when a bank opens one office one year and then opens zero offices the next year. so instead of jacking up stock prices long enough to ,mainstream cash for a few years, the bank modestly uses some profits to pay investor dividends.

Oct. 22 2008 01:47 PM
Leon Freilich from Park Slope


The economy's sinking,

Solutions accursed!

Government, save us--

Corporations first!

Oct. 22 2008 01:44 PM
Benjamin from Brooklyn

I'm glad someone gave background on the tax code and how it is an instrument of income distribution - from the lower to the higher income brackets. Why is this not more well known?

Oct. 22 2008 01:29 PM
Dave Watkins from Princeton, NJ

Thank you for putting on an expert who is not agreeing with the mass hysteria in DC/wall st.

Whether or not he is totaly right, at least it was refreshing to hear from an expert what most everyone I know thinks, ie the bailout is a gift for the fat cats and those of us on "main st" will be paying for the rest of our lives.

Oct. 22 2008 01:28 PM
Nancy from New Jersey

Thank you, thank you, thank you.

I've been too busy making a living to study any economics, but this show was an eye-opener. All I know is that for anyone with eyes to see and a sense of justice it should have been obvious that the whole economic system, especially in the US, was off-whack; when people were house-poor, working to pay mortgages and spending less and less on goods and services, OR going even further into debt, we should have noticed that there was something wrong. I tried to say so, but was pooh-poohed by my friends whose Bible was the WSJ and who saw their stock holdings go up and up and up.

I have to make sure I distribute the Harper's article far and wide.

Oct. 22 2008 01:10 PM
Louis Netter from Yonkers

This is precisely the point that needs to be made. This is economic feudalism and this message is crucial. It is obvious to regular folk that if it is increasingly harder to own a home, but is a necessity to many, people are burdened with more debt and therefore less economic opportunity in their lifetime. Until housing is more affordable, money will be sucked out of the “real” economy for the foreseeable future.

Oct. 22 2008 12:47 PM
Micheal from Manhattan

The answer is "money in the pocket"
when wealth is concentrated in a few hands, everything stops when those hands get jittery. If Americans woke up tomorrow with money in the bank, low or no debt, and a job to go to for the next 3 years... I'll bet that this whole game of drifting decimal places will vanish. Again we have more than enough food , shelter, flat screened TV's cars, bikes ... you name it within reason to go around for EVERYONE. There are 500 million mobile phones in China for pete's sake!
When will we realize that the rationing of economic privileges is a construct that is done to allow SOME to dominate consumption and exercise power over the rest of us.

Oct. 22 2008 12:28 PM
me from nyc

We constantly hear people like Steven Moore, a frequent guest on this station, touting that this recent economy and it's supposed rising tide has lifted all boats.
They write articles, appear everywhere armed with their set of stats and often go unchallenged. Then we hear the opposite in discussions like this one.
Can your distinguished guests tackle this endless debate?

Oct. 22 2008 12:24 PM


How is it that the SEC, by a stroke of a pen increased the leverage allowed for the banks to have in 2004? The NYT stated this a couple of weeks ago and that Henry Paulson lobbied for this when he was in charge of Goldman Sachs?

Oct. 22 2008 12:21 PM

let's reinstitute debtors' prison!

Oct. 22 2008 12:19 PM
Micheal from Manhattan

In the world we live in today, the factors of production are so cheap as to be almost free. One of the most important of those is labour, which requires aprox 2000 calories a day, shelter, education, entertainment (usually mass produced) and transportation.
We have no shortage of mass transportation , food, or entertainment in this country today.
Valuations for most of the things that most Americans want and need are some what meaningless. Everything is a product of Labour. We do need to spread the wealth around a bit more. Americans are paid 40% of the wages they should be paid and lent the remaining 60% by a "ownership" class that has reduced most of us to being economic sharecroppers, owning nothing and endlessly in debt to the "company store". (meanwhile they drown us in flat screened TV's, junk food, junk entertainment, and junk automobiles)In todays federal reserve system money is printed as needed unless there are true scarcities (and the list I noted above excludes those factors) The Government can print as much money as it needs to "motivate" the masses. Throughout history rulers have used other means to "get the job done" , building great civilizations that lasted for thousands of years... without capitalism. Because when Capitalism messes up.. Socialism is brought in to revive it. Socialism's "fixes" work so well that Capitalism can continue its 3 card montey game of economic musical chairs for another generation.

Oct. 22 2008 12:18 PM
j from nyc

shouldn't we be renaming this episode the trickle up economy? sad, but true.

Oct. 22 2008 12:18 PM
j from nyc

a question related to a comment afterwards:>>> in reference to the NoDoc documents, what kind of financial information does Dr. Steigletz/Dr. Hudson think is in them? And if the math in the noDocs was the real financial health of the comapny, isn't the math to be known somewhat off, and shouldn't the nodocs be part of the FBI investigation instead of being bought up by the bailout?

Oct. 22 2008 12:16 PM
Pam from Qns.

In the last hour on this station, a terrific economics writer spoke to Brian about the current economic crisis. She suggested that Stieglitz be the next Sec'y. Of Treas..
Will he seek the job?

Oct. 22 2008 12:12 PM

Phil Graham and Bill Clinton repealed Glass Steagel which made these institutions too big to fail.

Do we need a Glass Steagal 2.0?

Also do we need to reform the process of loan securitization to give originators "skin in the game" to ensure they make good loans to begin with?

And, can we reinstate the uptick rule?

Oct. 22 2008 12:11 PM
David from Montclair

When levinejosh writes of "growth based" does he mean "capital gains?"
(Sorry, in this case, non-jargon has meant confusion.)

Oct. 22 2008 11:37 AM

Is a "growth based" system of market reward necessary and a fundamental of "capitalism as we know it" or not?

(as opposed to dividends over profit from share turnover, etc. )

seems like the growth-based model requires volatility and non-quantifiable risk taking for the participant to really build wealth. And that seems the direct opposite of sustainability...

would love to hear some alternative ideas and practices you have seen in your travels...

Oct. 22 2008 10:53 AM

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