Joseph Stiglitz’s new book People, Power and Profits provides an updated manifesto for the progressive-socialist agenda. His manifesto is a call to solve our nation’s problems by relying more on government and, therefore, less on individual economic freedom. Specifically, this agenda calls for higher tax rates on the rich and businesses, rapid increases in federal spending, government control over markets and a massive increase in government regulations.
What Stiglitz fails to do is provide his readers with any historical context of how this agenda has worked. Progressive-socialist policies are not new. Over the past century the US experimented with these policies on five separate occasions: 1913-1920, 1929-1940, 1965-81, 1988-95 and 2004-15. Unfortunately, these years were among the worst years in our economic history. There was no increase in the value of the average worker take-home pay over this entire 52-year period. Since 1900 all of our economic progress occurred when policymakers avoided Stiglitz’s recommendations.
Not only have Stiglitz’s policy recommendations failed in the US, they have failed whenever and wherever they have been implemented. To one extent or another progressive-socialist policies are the norm throughout much of the world. The US is the only major country that has rejected such an agenda and embraced individual economic freedom for most of its history. This is why Americans enjoy living standards higher than 99.9% of those in the rest of the world.
As with other so-called progressive economists, Stiglitz is preoccupied with equality. This preoccupation leads him to praise policies enacted during the Great Depression of the 1930s. Stiglitz isn’t the only progressive economist to extol the merits of the Great Depression. Thomas Piketty, who wrote Capital in the Twenty-First Century, does so as well. Their admiration for the worst economic debacle in US history relates to what has become their prime economic objective—income equality. They apparently believe America is better off when incomes are more equal, even if it takes a collapse in the economy to achieve such an objective.
Research from the Fraser Institute shows income inequality is fairly stable whether countries are rich or poor. The main difference is the poor are much better off in rich countries than in poor countries. This is why so many people in poor countries want to come to America.
The main weakness of Stiglitz book is its dearth of meaningful data. Without such data, the author is able to make outlandish, general statements about US history without presenting a scintilla of evidence. Had the author seriously examined the history of US economic policies and their consequences, he would have concluded that the only time the US lost its way was whenever the country followed his agenda.
In addition to dealing with economics, Stiglitz touches on climate science by repeating the progressive mantra “…excessive emissions of greenhouse gases present an existential threat to the planet....“ As with his economic statements, he fails to provide any evidence for such an existential threat. As for economics, the historical evidence is clear—the real existential threat to prosperity is the progressive-socialist agenda.
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