Why do I like Joe Stiglitz? It might be because he has a Writing style simpatico with my own. It could be that it is nice to cite a Nobel Prize Winner; it making my own stuff sound like it is worth reading. I like to contemplate that it is concise and informative. He does not possess much belief in Monetarism or Inflation-Targeting; no one has ever asked my Opinion, but I have agreed with him since the early 1980s. Inflation importation is a Reality, and one that has a coaxial feedback (this meaning that all Prices adopt the highest range of Pricing throughout the World–Highs join with Highs with spread elimination of low Pricing). The Result of this co-active integration states that Inflation in lower GDP Countries cannot be fought, except in suppression of Inflation in the Countries of highest GDP–US, EU, Japan, and China (don’t get Me started on the recumbent value of Deflation–a postern which I suggest would have less disadvantage than traditionally implied).
I disagree slightly with Joe in his Proscriptions for altering current practice, mainly in thinking that high Interest rates do not forestall significant Investment, but truly ensures adequate Investigation before Capitalization. Management and Investment Profits need be curtailed, both in order to return Investment to the adequate supervision of Banking controls, and to improve the Wage and Salary positions of Labor; I could even envision a mandatory Investment law, with an automatic investiture of Company Stock for every Series of Labor hours employed. This would take Stock Option speculation away from Management, by granting the privilege to All, while limiting the Stock Grant process in entirety; functionally raising Stock prices over the long-run, bringing back Wage equalization policies, and establishing sound Stock Buyback policies.
We need to rescind bio-fuel subsidies as Stiglitz asserts, but this is best done with the implementation of a Carbon Tax which cannot be Gamed, so that there is real Incentive to find and develop alternate Sourcing of Energy. The unemployment and underemployment about which Joe worries is fundamentally mythical, as sharp Return to normal Marketing conditions will alleviate all such symptoms within short years of implementation. All that Said, I agree with Joe Stiglitz totally. lgl
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