ZCZC
BCN-17
US-ECONOMY-ECONOMICS-STIGLITZ,INTERVIEW
Top economist Stiglitz sees ‘significant slowdown’, not crisis
PARIS, Sept 27, 2019 (BSS/AFP) – Nobel prize-winning economist Joseph
Stiglitz said the global economy is entering a severe slowdown, but told AFP
in an interview he did not see it hurtling towards crisis.
“I would say that I don’t see a crisis,” said the US economist in Paris
where he was promoting the French version of his latest book: People, Power,
and Profits: Progressive Capitalism for an Age of Discontent.
“What I see is a significant slowdown,” he said. “In the process of this
significant slowdown, there will be bankruptcies.”
He said that slowdown deprived corporate managers of a cushion to soften
the consequences of their errors.
“When you are slowing down and you mismanage, you go bankrupt.”
This made people nervous, “but the particular situation for a global
crisis requires much more disruption than that”, he said.
Stiglitz said some developing countries like Argentina might be swept into
dire straits “but I don’t think it is likely that Europe and America will.”
The 2001 winner of the Nobel Memorial Prize in Economic Sciences said he
was concerned about rate cuts by US and eurozone central banks and a revival
of liquidity injections into the economy.
“I think the benefit that they get out of this is very little,” he said.
“They are clearly losing ammunition in case the situation gets worse.”
– ‘A problem called Trump’ –
Stiglitz said the three main economies — China, the eurozone and the
United States — were all having problems.
“China has been having a hard time going from a manufactured export led
growth to a more domestically driven growth,” he said.
Germany is under pressure to stimulate its own economy as well as its
eurozone partners, while the US “has a problem called Trump”, said Stiglitz.
MORE/HR/1032
ZCZC
BCN-18
US-ECONOMY-ECONOMICS-STIGLITZ,INTERVIEW 2 LAST PARIS
“It’s not just a trade war. He has introduced a new degree of political
uncertainty, a new level of chaos” that has reduced growth.
“Those three together mean slow economic growth,” said Stiglitz. “The
trade war just makes it all worse.”
In his book Stiglitz argues for a “progressive capitalism” where the state
would again wield more power over the economy, including regulating markets.
He recommended the breakup of internet giants.
“There was no reason that Facebook should have been allowed to aquire
Instagram and WhatsApp,” said Stiglitz.
The economist welcomed the French government’s move to tax the revenue of
Facebook, Apple, Amazon and Google who have been declaring global profits in
targeted low-tax jurisdictions.
The French initiative had forced “a global conversation about the taxation
of the digital companies”, he said.
“And it helps the people realize that there is something fundamentally
wrong when the richest corporations in the world are not paying taxes”.
Stiglitz was chief economist at the World Bank for three years after
serving as the head of US President Bill Clinton’s Council of Economic
Advisors.
BSS/AFP/HR/1035