92nd Street Y (92Y) is a multifaceted cultural institution and community center located on the Upper East Side of Manhattan in New York.
A few days ago I stumbled upon a video related to an event they organized about a month ago: “7 days of genius“. The video in particular had economists Thomas Piketty, Joseph Stiglitz and Paul Krugman debate mainly about inequality, with Alex Wagner from MSNBC as moderator. The video lasts 1h15′. If you happen to follow any of these economists (1) you will more than enjoy the time, as it is not only very informative but at points quite humorous too.
Apart from sharing the video, in this post I just wanted to highlight some passages of which I include excerpts transcribed by myself and some mental notes I made from the debate:
Krugman: “What’s not much known is that since those crisis days a lot of basic economics has worked remarkably well […] ” I’ve spent my life not entirely sure o whether I was a fraud or not […] it’s only been on the past 6 or so years that I’ve said “ok, you know, the staff works”, the sad thing is that half of the economics profession has thrown away things that we know work […] the real sin is not failing to predict the crisis it is clinging to doctrines that are obviously clear are not working”
Stiglitz: “all those fears that printing money would be inflationary was absurd” […] “economist who thought that putting the banks in the hospital for a year and a half, giving them not a blood transfusion, but a couple of trillion dollars of money would make them feel happier and that would get the economy working again. It’s clear that was wrong. That you need a clear fiscal policy, you need a real stimulus, and in a fundamental sense the economy was broken before the crisis and was using a bubble to keep that going, and that’s what we should have recognized.”
Krugman: “it’s been a race between us (USA) and Europe to see who can screw up worse, at the moment Europe is winning..”.
The three of them coincided in criticizing the (Euro zone) single currency with several fiscal policies, different interest rates on public debt, several governments… and even with that structural problem: “the situation is exacerbated by bad economic doctrines […] fiscal hypochondria” (Krugman)
Stiglitz: “we are focusing on too much debt… the real problem is that the fruits of our growth have not been widely shared”.
Stiglitz: “one of the things that Walmart raising their wages illustrates the fact that it’s not just market forces that are determining wages, that they had the power, the choice to raise their wages. […] take CEO pay, which has gone from 30x to over 300x the pay of the average worker without any justification, their productivity haven’t growth 10 times that of society”
Stiglitz: “when you have high level of youth unemployment, particularly men, when they can’t use their energy productively they tend to use them unproductively.”
Piketty: “I’m not particularly pessimistic, I see lots of good new, if you take a long perspective […] Europe is a much more prosperous and equal place today than what it was a century ago, when it was extremely unequal and more unequal than the US and today the US is more unequal than Europe, things change and different choices of policies and institutions can make things change. And also in the emerging world, there are lots of positive evolutions going on. I believe that globalization can help to reduce poverty in the world, assuming that we don’t expect that everything from the markets and we adopt the policies that can make globalization benefit broader groups of population, and sometimes governments do it. Take the example of Brazil”
I also enjoyed the criticism from Piketty to Jean Claude Juncker (current president of the European Union Commission and former Luxembourg prime minister) and its weak defense of his responsibilities in the making of Luxemburg a tax haven.
Finally, from the perspective of being Spanish, I found it interesting the following comment from Stiglitz:
“Let me call back to the question of the role of society. I was very pessimistic about Europe, but one hopeful sign of Europe is the growth of new groups like Podemos in Spain which are saying the old parties are note addressing the problems of raising unemployment and inequality. And now it’s a leading party with 27%. In the end is going to have to be political action that is going to address these issues. Civil society can bring the issue to the floor, but the real challenge is going to be to try to get those ideas into the political process […] in Europe it’s partly because it really collapsed, the real failure of old parties”
(1) I happen to like the three economists, both because of what I have read from them and the policies they advocate. As Luca warned me: the watching of the video made me fall in confirmation bias.