The Roaring Nineties, Joseph Stiglitz, Atlantic Monthly
Joseph Stiglitz recounts the country's economic roller coaster ride
over the last three presidencies. As former chief economist and
senior vice-president of the World Bank and chairman on the Council
of Economic Advisers, Stiglitz has witnessed first-hand the
strengths and weaknesses of the economic system employed by the
U.S. and the developed world. He notes that some historic mistakes
are easily understood, like how excessive deregulation and unsound
accounting practices led to the savings-and-loan scandal of '91.
And he explains how decades of investment in computers and
technology, Alan Greenspan's slow hand to raise the interest rate
even amidst fears of inflation, and Clinton's attacks on the
federal budget deficit during a downturn, played an immense roll in
the boom of the late '90s. Stiglitz goes on to provide a bird's-eye
view of the current economic turbulence while it's still unfolding.
In the case of Enron and Global Crossing, he blames misleading
accounting practices and tax incentives that encourage companies to
reward their executives with stock options rather then incentives
that could contribute to the companies long-term performance. While
Stiglitz concedes that the attack on American-style globalization
may be driven by Luddites and protectionists, he emphasizes that
it's fed by a perception of American hypocrisy and the unfairness
of the new global regime.