Freefall – Interview with a Nobel Prize Winning Economist

Freefall- Interview with a Nobel Prize Winning Economist

Santa Barbara Hosts Upcoming Lecture with Joseph Stiglitz

By David G. McAfee

On Friday 19, 2010, UCSB Arts and Lectures will be presenting a speech by Joseph Stiglitz- Nobel Prize winning economist and author of bestselling books Making Globalization Work, Globalization and Its Discontents and his newest book, Freefall – America, Free Markets, and the Sinking of the World Economy. The lecture, scheduled at 8:00 P.M. at the Victoria Hall Theatre on 33 West Victoria Street, promises to be an intriguing one as Stiglitz is scheduled to discuss- among other things- America’s economic recovery, the global economy, and President Barrack Obama’s recent proposals regarding the state of the American economy. I had the chance to speak with Professor Stiglitz about these issues and others, and asked him a few questions about the economy.

                In a recent LA Times interview, Stiglitz described the problem of our nation’s oversized banks as “…not only too big to fail, they are too big to manage; they are, in fact, too big to be.” When asked to elaborate upon this idea further with some suggestions on how we can stop this problem from occurring in the future, Stiglitz replied “we need to create a more level playing field… implicitly, the big banks are being subsidized, everybody knows that the government will bail them out and they can gain on their competitors not because they are more efficient, but because they are being subsidized.” This is a topic that Stiglitz will cover extensively in the upcoming seminar, and in his new book.

                In regards to the potential for an American recovery in the near future, Joseph said “I do not see a robust economic recovery in the near future…” he continued “…What is really important to the American people is very simple- ‘Are there jobs?’…Right now there aren’t, and it will be around the middle of the decade for unemployment rates to return to normal is the broad consensus.” The importance of employment is a crucial factor looking forward in America- and a recurring theme in Stiglitz’s talks.

                In light of President Barrack Obama’s recent speech outlining his ideas for economic recovery, I asked Stiglitz his opinion on Obama’s priorities when it comes to the various crises that our nation faces. He responded with some cautious optimism: “The president has a very difficult task, one that I try to describe in my book ‘Freefall’. The first task is to restore the economy to health- as we are doing so we have various long range problems that are not going away. It would be irresponsible to not pay some attention to the long range problems. His overall strategy seems reasonable.”

                Even though our country has a long way to go before the economy will be considered once again sound, Stiglitz remains hopeful about our future while urging the Federal Government to take a larger role by creating a proper stimulus while drastically changing our system of maintaining the larger banks. Stiglitz hammers his point home with his final words to the American public about the state of the American economy: “The economy remains weak; we need more govern action if we are going to get our unemployment rate down to acceptable level.”