Nobel Economist: Government’s Response is WORSE than Socialism

Nobel prize winning economist Joseph Stiglitz says that the government’s response to the financial crisis is worse than socialism:

Some have called this “socialism with American characteristics”. But socialism is concerned about ordinary individuals. By contrast, the US has provided little help for the millions of its people who are losing their homes. Workers who lose their jobs receive only 39 weeks of limited unemployment benefits, and are then left on their own. And, when they lose their jobs, most also lose their health insurance.

America has expanded its corporate safety net in unprecedented ways, from commercial banks to investment banks, then to insurance, and now to cars, with no end in sight. In truth, this is not socialism, but an extension of long-standing corporate welfarism. The rich and powerful turn to the Government to help them whenever they can, while needy individuals get little social protection.

We need to break up the too-big-to-fail banks; there is no evidence that these behemoths deliver societal benefits that are commensurate with the costs they have imposed.

This raises another problem with America’s too-big-to-fail, too-big-to-be-restructured banks: they are too politically powerful. Their lobbying efforts worked well, first to deregulate, and then to have taxpayers pay for the clean-up. Their hope is that it will work again to keep them free to do as they please, regardless of the risks for taxpayers and the economy. We cannot afford to let that happen.

I believe the word Stiglitz is looking for is oligarchy.

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  • The country is toast. I don't see how we can recover.

  • The word your are looking for is Fascism, not that Oligarchy isn't a facet of that.

  • Take a society that already has a massive divide between rich and poor and remove the social safety net and easy credit that allows the weakest and poorest some reasonable comfort and hope – you are in banana republic territory. You have a large number of people are very angry and very susceptible to demogogues who use racism and xenophobia to incite violence. It is happening here, not just in Kenya or Zimbabwe.There are real villains in this piece, but no political movement or large media outlet is talking about them. In fact, the so-called opposition has let the far right co-opt the very people their policies were damaging. I fear svend is right.

  • Oligarchic fascism supporting a culture of presumptuous entitlement. The Greenspan Put rotted out real capitalism, and it only took a little fear-mongering for us to flee into the reassuring arms of the fascist state.Svend is right.

  • Great article/post. I'll link on facebook.