Tuesday, October 12, 2004


The downhill slope of America

Joseph Stiglitz, professor of Economics at Columbia University and winner of the 2001 Nobel Memorial Medal for Economics on the failures of the Bush Administration:

The opportunity: if the economy was well managed, the incomes of Americans could continue to rise as they had done in the 1990s. The challenge: to manage the economy so that growth would be robust enough to create the new jobs required by new entrants to the labour force. Bush failed the challenge, and America lost the opportunity.

True, the economy was stimulated a little by the tax cuts. But there were other policies that would have provided far more stimulus at far less cost. Bush's objective was to push forward a tax agenda that shifted the burden away from those who could best afford to bear it.

Bush's failed policies have cost the economy dearly, and have left it in a far weaker position going forward. The non-partisan Congressional Budget Office agrees that the deficit will not be eliminated in the foreseeable future - or even cut in half, as Bush has promised. Expenditures on which America's future economic health depends - infrastructure, education, health and technology - will be crowded out.


There might be some hope for the future if Bush owned up to his mistakes and changed course. But no: he refuses to take responsibility for the economy, just as his administration fails to take responsibility for its failures in Iraq. In 2003, having seen that its tax cuts for the rich had failed to stimulate the economy, the administration refused to revise its strategies

In other words - we have no future. We are at the zenith of American history, and we're about to take a toboggan ride towards the nadir. There may be peaks again someday, but for the rest of my life, it's all valley.

Is that too pessimistic? Perhaps. Probably. People have made fools of themselves announcing the "End of History." But I'd rather be pessimistic and wrong than optimistic and wrong. I think we are clearly going in the wrong direction, and I don't see any energy for reversing course. Taxes have become the ultimate taboo in America, and public expenditure where it is really needed (as opposed to where it isn't) is a slight second. The wealthy are making out like bandits, at everyone else's expense, and we appear to be swallowing their hooey that what's good for them is really good for us, too. Meanwhile, the Chinese show no sign of slowing down their drive to be the next big dog on top of the pile; not a bad idea to study some Mandarin, if you're young and ambitious. May come in handy over the next 50 years.

If (more likely when) they start studying Chinese instead of English in India, we'll know it's all over.
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