Prize Fighter Thumps Bush (J. Stiglitz takes on "Dubyanomics", IMF)

Faisal Islam meets Joseph Stiglitz, the Nobel laureate who took on the IMF and is now turning his guns on the American President

Sunday May 18, 2003

The Observer

Jospeh Stiglitz is no bully. After last year's publication of Globalisation and its Discontents, which set off a limpet mine under the cozy and unchallenged world of International Monetary Fund policymaking, the Nobel Prize-winning economist now has his sights set closer to home.

Stiglitz is putting the finishing touches to a searing critique of Dubyanomics. The emergence of a neo-conservative economics makes the Columbia university professor almost nostalgic for the neo-liberalism that he successfully debunked last year.

'They talk a free-market ideology but, if you look at their politics in terms of bailouts and protectionism, it is not a free-market policy; if you look at their procurement agenda and what they did with Bechtel in Iraq, it doesn't even look like a fair competition agenda. So you have to sort of suspect an element of ideology but more an element of particular groups seizing control,' says the former chairman of the White House council of economic advisers under President Clinton.

Stiglitz drives a bulldozer through US domestic economic policies, too. The American economy has lost 2 million jobs since Bush came to power.

'There is less concern about distributive issues, about unemployment, welfare, education and safety nets,' says Stiglitz. 'Underneath this there is an anti-distributive agenda. You can't look at the proposed <$695bn (£428bn)> dividend tax cut without seeing this. There are ways of integrating corporate and personal income tax while maintaining progressivity, like in Europe. Their attempt here was to destroy progressivity under the name of a structural agenda.'

He was one of 350 top economists who signed a high-profile letter in March warning President Bush of the risk that chronic deficits would imperil public pensions and healthcare provision.

'It is not just that they do not pay much attention to it but they are positively engaged in increasing inequality,' says Stiglitz.

Roaring Nineties, his new book, due out in autumn, will contain an account of his time at the White House during the Clinton boom years. In the first two years of the current Bush administration, that boom has been reclaimed as the ultimate success of Reaganomics.

'There's no evidence that the pace of productivity growth in the 1980s was different to that of the 1970s, labour force participation was no better, savings were no higher,' Stiglitz says. 'There's no economic evidence in favour of these Reagan supply-siders.'....more >>

http://www.observer.co.uk/business/story/0,6903,958021,00.html

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