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Monday, June 04, 2012

Krugman and Stiglitz: Our Most Widely Ignored Public Intellectuals

Why don't those in power listen to Joseph Stiglitz and Paul Krugman?:

Our Most Widely Ignored Public Intellectuals, by Robert Kuttner: ...As the most prestigious economic dissenters of this era, Joseph Stiglitz and Paul Krugman form a category of two: astonishingly prescient, widely read, and largely ignored by those in power. ...
Taken together, Stiglitz and Krugman occupy something like the indispensable role that John Maynard Keynes played in the period between 1919 and his death in 1946. Keynes’s sheer intellect and deftness at translating abstruse economics into wry English won him a wide readership. In a time like our own, when austerity was peddled as the cure for depression, his was the voice in the wilderness whose theoretical insights about the need for public outlays to maintain demand kept being vindicated by events. ...
In this orthodox climate, Stiglitz and Krugman are excluded much as Keynes was. The practical reforms that logically flow from their ideas would include drastically increasing regulation of finance, creating a medley of measures to promote equality, and massively increasing public spending. None of this has been on the table for a Democratic president since Lyndon Johnson. ...
If these eminent thinkers are at the edge of economic orthodoxy, why are they marginalized within the corridors of power? One reason is that politics, not surprisingly, tends to get personal. Both Stiglitz and Krugman have decided to air their views in public rather than operating as discreet outside members of a kitchen cabinet... Stiglitz, even more than Krugman, has not been shy about criticizing Summers and Treasury Secretary Timothy Geithner by name, and the disfavor has been richly returned. Though Krugman’s column praises the Obama administration when the president gives Krugman half a reason to do so, the White House accurately perceives him and Stiglitz as off-message and part of the opposition. 
More fundamental to their marginalization is the relative radicalism of what Krugman and Stiglitz are advocating in our conservative era, one in which even Democratic presidents have done little to reverse unconstrained finance, shrunken government, and deepening inequality. To embrace their wisdom would require something close to a political revolution. So two of our most lauded economists remain prophets with little power to change events. America would be a far healthier country if they broke through.

It's been really frustrating to watch policymakers listen to the people who got it wrong again and again, not just before the crisis but during it as well, while ignoring the people who largely got things right, and then wonder why the policies weren't more effective. If they'd listened, and it's not too late to start, things could be better today.

    Posted by on Monday, June 4, 2012 at 09:44 AM in Economics | Permalink  Comments (93)


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