Wednesday, December 31, 2008
Stiglitz Writes an Excellent Article for Vanity Fair
This is my last post of MONEYTHOUGHTS for 2008. When I started this blog on February 13, 2008, I had no idea where I was going with it, or for that matter, whether I would continue to write something almost every day. This has been a year for the history books with all that has happened in the United States both politically and economically. Some might say that this year saw all the financial and economic bombs, that were armed over the proceeding years, explode in 2008. The panic that followed should not have surprised anyone. Earlier this week, the six month T-Bill went at auction for a yield of 0.25%. 25 basis points or a quarter of one percent, whichever way it is easiest for you to understand. The world has rushed for cover, and cover comes in the form of the safety of U.S. Treasury Bills.
During the year, I have attempted to describe financial and economic events and ideas in a simple way by staying, as much as possible, away from jargon and big words that explain very little. I like, by my nature, to keep things simple.
By pure luck, I had the opportunity to read an article in VANITY FAIR over the weekend, as I do not usually read this magazine. As I was reading the list of articles in the January 2009 issue with Tina Fey on the cover, I came across an article written by the Nobel-Laureate economist Joseph E. Stiglitz. The article is titled “CAPITALIST FOOLS”, and is divided into five parts. Each part is a mistake that was made over the years that finally came together to cause the financial and economic crisis of 2008. Naturally, I am in complete agreement with professor Stiglitz and the five major points he makes in this article. It is a short article and well worth reading.
I have tried to keep my language clean for the most part, but there have been times when I felt that the word needed to carry the way I felt about the whole situation or idea, so, I said it, and I hope I made my point. Professor Stiglitz has written an excellent article, too bad all members of congress are not required to read his article before taking their seat. Those of you who are interested in Professor Stiglitz’s analysis, should either go to the library and read this article or buy a copy of this issue of Vanity Fair. Everyone should read this article including Phil Gramm and Alan Greenspan. They above all others could stand to learn something from their mistakes. I have to assume that these two men, who played such a large role in the undoing of our economy and the financial and economic crisis that followed, were motivated by their sincere beliefs, and not by the fact that they had shit for brains. Read Stiglitz’s article, it discusses the five key areas where the mistakes were made. Before we can go forward with a successful recovery plan, we need to understand the mistakes that created the situation at hand, both financial and economic .