There’s an excellent profile of Nobel economist Joe Stiglitz in Newsweek. I tried to excerpt it, but it’s really too good to get the gist in bits and pieces. Please do read it.
I met Joe and his wife Anya at a conference last summer in Greece, the Symi Symposium, hosted by Greek opposition leader George Papandreou. Great people. Interesting. Welcoming. I got to interview Joe for the blog – I’m posting the first part of the interview at the end of this story – and mind you, this was two months before the economic meltdown last September. We talked about oil prices, and why they’re high, and the mortgage crisis and more. His intelligence is very accessible. I learned a lot in the interview, and if you have the time, do watch it – it’s just a nice economics lesson on the issues of the day, in a manner in which we simple folk can understand.
Here’s the Newsweek piece:
Summers’s aide soon called back, and this time he said it was urgent: could Professor Stiglitz come to Washington for a dinner hosted by the president—that same night? Anya [Stiglitz] patched him through to Joe’s office at Columbia University; Stiglitz accepted, and jumped on an early train. He was a little miffed: the other eminent economists attending the dinner, like Princeton’s Alan Blinder and Harvard’s Kenneth Rogoff, had been invited the week before. Stiglitz, a former chairman of Bill Clinton’s Council of Economic Advisers, had supported Barack Obama as a candidate as early as 2007. But until that day, four months into the administration, he had heard barely a word from the White House. Even now, when the president was making an effort to hear a range of economic voices, Stiglitz seemed to be an afterthought. (A White House spokesman said only that the president wished to include Stiglitz.)….
Stiglitz has warned for years that pro-market zeal would cause a global financial meltdown very much like the one that gripped the world last year. In the early ’90s, as a member of Clinton’s Council of Economic Advisers, Stiglitz argued (unsuccessfully) against opening up capital flows too rapidly to developing countries, saying those markets weren’t ready to handle “hot money” from Wall Street. Later in the decade, he spoke out (without results) against repealing the Glass-Steagall Act, which regulated financial institutions and separated commercial from investment banking. Since at least 1990, Stiglitz has talked about the risks of securitizing mortgages, questioning whether markets and authorities would grow careless “about the importance of screening loan applicants.” Malaysian economist Andrew Sheng says, “I think Stiglitz is the nearest thing there is to Keynes in this crisis.”…
Despite the Obama team’s occasional efforts to reach out to him, Stiglitz remains deeply unhappy about the administration’s approach to the financial crisis. Rather than breaking up or restructuring the big banks that failed, “the Obama administration has actually expanded the notion of ‘too big to fail,’ ” he says. In a veiled poke at his dubious standing in Washington, Stiglitz adds: “In Britain there is a more open discussion of these issues.” A senior White House official, responding to this critique, says that the Obama administration is most often criticized these days for intervening too much in the economy, not too little….
While Stiglitz was flattered by the discussion over a dinner of roast beef and Michelle Obama’s homegrown lettuce, he can’t stop himself from complaining that an occasional meal with dissidents is not the best way for the president to formulate policy. “Some of the most difficult debates and judgments can’t really be hammered out in an hour-and-a-half meeting covering lots of topics,” he says. Stiglitz may a prophet without much honor in Washington, but he seems to be determined to keep the prophecies coming.