Monday, January 25, 2010

Stiglitz: Bring On The Second Stimulus!

This is important. Many liberal pundits, including a distressing number of op-ed columnists at the NY Times (but not Bob Herbert!) have given up a second stimulus, because either a) they've drunk the neoliberal kool-aid about the government being out of money b) they think it will alienate independent voters or c) they think it's irrelevant for the midterm elections.

Well, you know what irritates independent voters, and voters across the board? Unemployment, frozen raises, shrinking work hours and underemployment!!

So if you can't stand the heat, get out of the kitchen. It's ridiculous to think you can't find some money to create jobs and stimulate economic activity in a $3 trillion economy. Recovering some of the bank bailout, and reducing military spending to meet the legitimate needs of the US, could yield several hundred billion right there. And as Stiglitz points out, policymakers should redouble their efforts to assist struggling homeowners, as the festering mortgage crisis continues apace.

And as for the mid-term elections, why should we starve the economy so that the Republicans can come back and impose even more austerity and deregulation. Change, or more of the same?

So, let's bring in the Nobel-prize winning Stiglitz as an senior adviser to Obama, and dump the other guys. Who's with me?

Stiglitz: Bring On The Second Stimulus! StreetTalk - Inside Wall Street
by Robert Lenzer
January 20, 2010

"...Joseph Stiglitz, Nobel prize-winning Columbia University economist, called for a 'second stimulus for job creation' last night during a presentation of his new book on the economic crisis, 'Freefall.' Stiglitz also predicted at New York's YMHA that another 2.5-3 million homes will go into foreclosure, since '1 in 4 homes in the US are underwater,' meaning their resale value is below the amount of mortgage debt on the property."

"Stiglitz, who has been a severe critic of both Wall Street and the Obama administration, indicated the economy could dip back into recession unless the banks ease the terms of mortgages. Unless there is a stimulus 'unemployment will rise in 2010, not decline,' Stiglitz asserted under questioning from Matthew Bishop, The Economist's New York bureau chief."

Read rest of article

Read Stiglitz book excerpts in the Christian Science Monitor

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