Stiglitz Forecasts Financial Doom, Gloom

Columbia University professor and Nobel laureate Joseph Stiglitz is not optimistic about the prospect of the American Dream as the country moves into 2012. Stiglitz waxes philosophical about the country’s growing wage gap, terminal unemployment and financial crises that have erupted in multiple areas of the world. He opines that working on long-term problems like fiscal debt could actually solve short-term problems like unemployment if the world’s power players were not rooted in politics as usual. The fear, Stiglitz says, is that the system will cataclysmically right itself before cooler heads prevail. For more on this continue reading the following article from Economist’s View.

I think it would be fair to say that Joe Stiglitz isn't predicting a return to general prosperity anytime soon:

The Perils of 2012, by Joseph E. Stiglitz, Commentary, Project Syndicate: The year 2011 will be remembered as the time when many ever-optimistic Americans began to give up hope. President John F. Kennedy once said that a rising tide lifts all boats. But now, in the receding tide, Americans are beginning to see not only that those with taller masts had been lifted far higher, but also that many of the smaller boats had been dashed to pieces in their wake.

In that brief moment when the rising tide was indeed rising, millions of people believed that they might have a fair chance of realizing the “American Dream.” Now those dreams, too, are receding. ...

This year is set to be even worse. It is possible, of course, that the United States will solve its political problems and finally adopt the stimulus measures that it needs to bring down unemployment to 6% or 7% (the pre-crisis level of 4% or 5% is too much to hope for). But this is as unlikely as it is that Europe will figure out that austerity alone will not solve its problems. ...

Meanwhile, long-term problems – including climate change and other environmental threats, and increasing inequality in most countries around the world – have not gone away. Some have grown more severe. ...

I'm not sure it was intended as a joke, but this part made me laugh: "It is possible, of course, that the United States will solve its political problems and finally adopt the stimulus measures that it needs..."

This article was republished with permission from Economist's View.