Joseph Stiglitz quotes:

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  • The notion that every well educated person would have a mastery of at least the basic elements of the humanities, sciences, and social sciences is a far cry from the specialized education that most students today receive, particularly in the research universities.

  • I grew up in a family in which political issues were often discussed, and debated intensely.

  • Macroeconomic policy can never be devoid of politics: it involves fundamental trade-offs and affects different groups differently.

  • I went to Amherst because my brother had gone there before me, and he went there because his guidance counselor thought that we would do better there than at a large university like Harvard.

  • My teachers helped guide and motivate me; but the responsibility of learning was left with me, an approach to learning which was later reinforced by my experiences at Amherst.

  • Economists often like startling theorems, results which seem to run counter to conventional wisdom.

  • My research in this period centered around growth, technical change, and income distribution, both how growth affected the distribution of income and how the distribution of income affected growth.

  • Amherst was pivotal in my broad intellectual development; MIT in my development as a professional economist.

  • International lending banks need to focus on areas where private investment doesn't go, such as infrastructure projects, education and poverty relief.

  • Amherst is a liberal arts college, committed to providing students with a broad education.

  • I went to public schools, and while Gary was, like most American cities, racially segregated, it was at least socially integrated - a cross section of children from families of all walks of life.

  • The extra curricular activity in which I was most engaged - debating - helped shape my interests in public policy.

  • But individuals and firms spend an enormous amount of resources acquiring information, which affects their beliefs; and actions of others too affect their beliefs.

  • The top 1 percent have the best houses, the best educations, the best doctors, and the best lifestyles, but there is one thing that money doesn't seem to have bought: an understanding that their fate is bound up with how the other 99 percent live. Throughout history, this is something that the top 1 percent eventually do learn. Too late.

  • Similarly, payments for a dead soldier amount to only $500,000, which is far less than standard estimates of the lifetime economic cost of a death. This statistical value of a life in the US amounts to circa $6.5 million.

  • The issue is: $1 trillion or $2 trillion is a lot of money. If our objective is to have stability in the Middle East, secure oil, or extend democracy, you can do a lot of democracy buying for this sum. To put it in context: The whole world spends $50 billion a year on foreign aid.

  • Drug companies spend more on advertising and marketing than on research, more on research on lifestyle drugs than on life saving drugs, and almost nothing on diseases that affect developing countries only. This is not surprising. Poor people cannot afford drugs, and drug companies make investments that yield the highest returns.

  • As I noted in my Nobel lecture, an early insight in my work on the economics of information concerned the problem of appropriability - the difficulty that those who pay for information have in getting returns.

  • If stability and efficiency required that there existed markets that extended infinitely far into the future - and these markets clearly did not exist - what assurance do we have of the stability and efficiency of the capitalist system?

  • I think in part the reason is that seeing an economy that is, in many ways, quite different from the one grows up in, helps crystallize issues: in one's own environment, one takes too much for granted, without asking why things are the way they are.

  • The Bush administration has been doing everything it can to hide the huge number of returning veterans who are severely wounded - - 17,000 so far including roughly 20 percent with serious brain and head injuries. Even the estimate of $500 billion ignores the lifetime disability and healthcare costs that taxpayers will have to spend for years to come.

  • Wall Street banks have used the same tactic that Bush used in the war on terror - fear - and they've basically said that if you don't do what we tell you, the sky will fall. If you don't do what we tell you, it will be the end of capitalism as we know it. The failure of Lehman Brothers lent some credence to those fears.

  • I recognized that information was, in many respects, like a public good, and it was this insight that made it clear to me that it was unlikely that the private market would provide efficient resource allocations whenever information was endogenous.

  • Certainly, the poverty, the discrimination, the episodic unemployment could not but strike an inquiring youngster: why did these exist, and what could we do about them.

  • Unfettered market American-style capitalism doesn't work. Developing countries can't afford that kind of luxury. They just can't afford it. Period. If there's a mistake, they can't afford to put out $2 trillion.

  • In debate, one randomly was assigned to one side or the other. This had at least one virtue - it made one see that there was more than one side to these complex issues.

  • World War II was really unusual, because America was in the Great Depression before. So the war did help the US economy to get securely out of this decline. This time, the war [in Iraq] is bad for the economy in both the short and long run. We could have spent trillions in research or education instead. This would have led to future productivity increases.

  • No one would look just at a firm's revenues to assess how well it was doing. Far more relevant is the balance sheet, which shows assets and liability. That is also true for a country.

  • Much of my work in this period was concerned with exploring the logic of economic models, but also with attempting to reconcile the models with every day observation.

  • Temporary nationalization of the banks that are in very bad shape would mean basically that the government is the temporary owner. I always believe that the government should focus on its comparative advantages, and banking is not one of them. It should, therefore, if it nationalizes banks, sell them back to the private sector.

  • There must have been something in the air of Gary that led one into economics: the first Nobel Prize winner, Paul Samuelson, was also from Gary, as were several other distinguished economists.

  • We are helping the people that [George W.]Bush says are evil. Teheran couldn't be happier about the high oil prices resulting from the Iraq war.

  • I've always been sceptical about the notion that the market is a person you can engage in an argument with, and that that person is an intelligent, rational, well-intentioned person: it is fantasy. We know that ... the market is subject to irrational optimism and pessimism, and is vindictive ... You're dealing with a crazy man ... Having got what he wants he will still kill you.

  • Active learning is always involved with interaction between teachers and students and Socratic methods and that's gonna continue.

  • The important lesson of the deficit is - and the national debt - is we have to be careful about how we're spending money.

  • Not everybody is qualified to go to Stanford, but everybody should have access to the best qualify for which they are eligible.

  • The striking thing about America is - it's historically, extraordinary unusual,I don't of any other instance - is that productivity of workers and wages have not moved in tandem.

  • I knew that discrimination existed, even though there were many individuals who were not prejudiced.

  • Trickle-down economics is a myth. Enriching corporations - as the TPP would - will not necessarily help those in the middle, let alone those at the bottom.

  • Development is about transforming the lives of people, not just transforming economies.

  • Anybody who knows about capitalism knows that bankruptcy is an essential part of capitalism.

  • What you measure affects what you do. If you don't measure the right thing, you don't do the right thing.

  • It is trust, more than money, that makes the world go round.

  • The international institutions go around the world preaching liberalization, and the developing countries see that means open up your markets to our commodities, but we aren't going to open our markets to your commodities. In the nineteenth century, they used gunboats. Now they use economic weapons and arm-twisting.

  • Governments can enhance growth by increasing inclusiveness. A country's most valuable resource is its people. So it is essential to ensure that everyone can live up to their potential, which requires educational opportunities for all.

  • American inequality didn't just happen. It was created.

  • The problem is a lot of what is called economics is not economics. It is more ideology or religion.

  • Capital market liberalization includes freeing up deposit and lending rates, opening up the market to foreign banks, and removing restrictions on capital account transactions and bank lending. The focus is on deregulation, not on finding the right regulatory structure.

  • I trace the inequality to a particular set of decisions that we took when we lowered the tax rate from 91% down to very low levels at the top, where we stripped away regulations. So the result of that was not a more dynamic economy, but a more unequal society. We tried the experiment of trickle-down. A third of a century later, we can say fairly definitively that it was a failure.

  • The IMF insisted that both Russia and Brazil maintain their currency at over-valued levels. Who are you protecting when you try to maintain that exchange rate by having high interest rates? You're protecting domestic and foreign firms that have gambled on the exchange rate. And who is paying the price? The small businesses that did not gamble [and no longer can afford loans], the workers who are going to be put out of jobs.

  • Most poor people earn more than minimum wage when they are working; their problem is not low wages. The problem comes when they are not working.

  • They [free market policies] were never based on solid empirical and theoretical foundations, and even as many of these policies were being pushed, academic economists were explaining the limitations of markets for instance, whenever information is imperfect, which is to say always.

  • Nationalization of private debts undermines prudential lender behavior and is a government intervention in the market.

  • Any society has to delegate the responsibility to maintain a certain kind of order. Enforcing regulations, making sure people stop at stoplights. We can't function as a society without rules and regulations, and the enforcement mechanism of those rules and regulations.

  • We could have saved Wall Street without putting our future in jeopardy. I predicted that there would be all-around consequences - in the long run as well as in the short run. People are now saying we can't afford health care reform because we spent all the money on the banks. So, in effect, we're saying that it's better that we give rich bankers a couple of trillion than giving ordinary Americans access to health care.

  • In developing countries, lack of infrastructure is a far more serious barrier to trade than tariffs.

  • The only people benefiting in Iraq war are George Bush's Jr. friends in the oil industry. He has done the American economy and the global economy an enormous disfavor, but his Texan friends couldn't be happier.

  • What most Americans mean when they say "the end of the recession" is, "When will it be back to normal? When can we get jobs? When will the employment rate be back to 4 percent or 5 percent?"

  • The protesters have called into question whether there is a real democracy. Real democracy is more than the right to vote once every two or four years. The choices have to be meaningful. But increasingly, and especially in the US, it seems that the political system is more akin to "one dollar one vote" than to "one person one vote". Rather than correcting the market failures, the political system was reinforcing them.

  • Workers' rights should be a central focus of development.

  • Finance ministers and central bank governors have the seats at the table, not labor unions or labor ministers. Finance ministers and central bank governors are linked to financial communities in their countries, so they push policies that reflect the viewpoints and interests of the financial community and barely hear the voices of those who are the first victims of dictated policies.

  • The only surprise about the economic crisis of 2008 was that it came as a surprise to so many.

  • The budgetary cost to the UK of the wars in Iraq and Afghanistan through 2010 will total more than £18 billion. If we include the social costs the total impact will exceed £20 billion.

  • Climate change is a reality.

  • The IMF is a more complicated issue. I think there is a broad sentiment among both the left and the right that the IMF may be doing more harm than good. On the right, there's the view that it represents a form of corporate welfare that is counter to the IMF's own ideology of markets. But anybody who has watched government from the inside recognizes that governments need institutions, need ways to respond to crises. If the IMF weren't there, it would probably be reinvented. So the issue is fundamentally reform.

  • There is a growing consensus that the European systems have worked better than the American: They have been able to deliver better health care to more people at lower cost.

  • It's actually a tribute to the quality of economics teaching that they have persuaded so many generations of students to believe in so much that seems so counter to what the world is like. Many of the things that I'm going to describe make so much more common sense than these notions that seem counter to what ones eyes see every day.

  • If you destroy a firm, you can't pull it out of bankruptcy overnight.

  • If you're injured in an automobile accident, and you sue the driver, you get much more for your injury than if you're fighting for your country. There's a double standard here.

  • Health care is very different from other sectors of the economy in several respects, one of which is the fact that the risk can be very high beyond people's ability. That leads to insurance.

  • When you're facing the threat of recession, you need to have an expansionary monetary and fiscal policy. Pre-Keynesian, Hooverite views are dead everywhere except on 19th Street in Washington.

  • I understand why political leaders in the beginning want to be cheerleaders to generate optimism. But to admit that they didn't understand the depths of the problem afterwards, I found a little bit surprising.

  • The fact that the government had to put up hundreds of billions of dollars to Citibank in guarantees was a public declaration that Citibank was a mess. Making Citibank go through financial restructuring would not have conveyed any more different information. So it's very hard to see why it would have had that kind of a panic if it were done well.

  • The military is focusing only on the short run costs. If they don't provide appropriate body armor, they save some money today, but the healthcare cost is going to be the future for some other president down the line. I view that as both fiscally and morally irresponsible.

  • I don't think if we had been able to make that choice rationally, we would have said that's what we want to do. We would have said: "Can't we save the banks and solve our health care problems?" The answer is yes. You could have.

  • I think what they've been doing is largely almost in firefighting mode without a good conceptual framework - either at the micro or the macro level. Micro, you would ask: "What kind of financial or banking system do we want?" Macro, you would say: "What are the underlying problems in the structure of our economy?"

  • You can't overestimate what happens when you encourage regulators to believe that the goal of regulation is not to regulate.

  • I think that for the developing world there are many versions of capitalism, and countries have to choose one that's appropriate.

  • When I said "the pocket of the banks," it is not necessarily a mercenary relationship. It is a mindset.

  • I don't think anybody really thinks that one should get rid of the World Bank. Reform is one thing, but getting rid of it I think would be wrong.

  • They [political leaders ] thought the only problem was the banking system, and if they fixed the banking system, all would be fine. But the banking system and the mortgage problem were symptomatic of some deeper problems, and evidently they still haven't recognized those deeper problems.

  • For that to happen, growth has to be very strong. To get back to normalcy, we will have to have extended growth of more than 3 percent. That's not in the cards.

  • Even if Bush could be forgiven for taking America, and much of the rest of the world, to war on false pretenses, and for misrepresenting the cost of the venture, there is no excuse for how he chose to finance it. His was the first war in history paid for entirely on credit. As America went into battle, with deficits already soaring from his 2001 tax cut, Bush decided to plunge ahead with yet another round of tax relief for the wealthy.

  • If the President asked you to help, I don't think anybody could refuse, unless one felt that one couldn't be effective.

  • The recovery of the banks is what happens when you reduce competition, lend money to them at zero interest rates, allow them to gamble. That particular style of restoration actually inhibits the economic recovery.

  • You saw on your TV what happened in New Orleans after Hurricane Katrina. The Reserves or National Guard are usually the people we use for those national emergencies. They weren't here, they were over in Iraq, and so we were less protected.

  • GDP tells you nothing about sustainability

  • The life prospects of an American are more dependent on the income and education of his parents than in any of the other advanced industrial countries.

  • Poverty is what we call the extremes at the bottom.

  • For instance, one of the costs of the war is that soldiers today get very seriously injured but stay alive, and we can keep them alive but at an enormous price.

  • Most people think the Iraq war has increased the probability of an attack. However, it's difficult to put this aspect into financial terms.

  • The reason that the invisible hand often seems invisible is that it is often not there.

  • There will come a moment when the most urgent threats posed by the credit crisis have eased and the larger task before us will be to chart a direction for the economic steps ahead. This will be a dangerous moment. Behind the debates over future policy is a debate over history-a debate over the causes of our current situation. The battle for the past will determine the battle for the present. So it's crucial to get the history straight.

  • One has to always ask the question: Where can one be most effective in helping shape policies? It is always difficult when you're inside because you're very constrained.

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