Stiglitz at INET

It's great that a guy like Stiglitz has discovered that it is impossible for everyone to simultaneously run a current account surplus.  What he seems to deliberately misunderstand is why everyone seems to be trying to do this.  In his mind, countries like Germany, Korea, and Japan who make a great effort to create these trade surpluses by engineering and manufacturing leading edge goods are, at best, quaintly old fashioned.  Considering how much "easier" it is to create an income stream through financial maneuver, people who want to prosper by doing the very difficult, very well seem almost crazy, or at least hopelessly naive to guys like him.

Just remember, the INET conference was funded by a currency speculator (Soros) so it was VERY unlikely that there would be defenders of Producer economics anywhere in sight.  In the Anglo / American world of neoliberal economics, Producers barely show up on their cultural radar so why would their economic thinking even be allowed to enter into these discussions?  It would be like allowing an air conditioner repairman into a high stakes poker game.  So a Stiglitz is probably the best we can hope for—a reasonably enlightened Predator.  Oh well, you gotta start somewhere.

Stiglitz's Powerpoint slides can be found at the link below—see sample.  Stiglitz is a "recovering" neoliberal—obviously, he still has a way to go.

Joe Stiglitz's Presentation On Why The Entire Global Economic System Is Doomed To Fail

Joe Weisenthal | Apr. 15, 2012, 8:55 AM

At the Institute for New Economic Thinking conference in Berlin, economist Joe Stiglitz delivered a presentation titled Is Mercantilism Doomed to Fail? China, Germany, and Japan and the Exhaustion of Debtor Countries.

The basic idea is: A few powerhouses like China, Germany, and Japan, plus some commodity based economies, have thrived in a system where they do all the exporting, and a few countries like the US run massive trade deficits.

But that system is coming to an end, as countries realize that their trade deficits are unsustainable, and seek to become trade surplus countries at the same time. Of course, not everyone can run surpluses, so this becomes a game of hot potato, with everyone pushing the deficit to someone else, via currency devaluation and other aggressive trade moves.

In this presentation, Stiglitz explains why the system is heading towards collapse.

Stiglitz hints a globalist solution, with a non-dollar reserve currency, and more coordination of monetary policy to avoid currency wars and competitive devaluations. more