Writing in last week’s Sunday Telegraph, leading economist Joseph Stiglitz warned that the world economy faces a “Japanese-style malaise, with no end in sight.” What makes matters worse, he adds, is that Japan’s “lost decade” of low growth was accompanied by low unemployment and high “social cohesion”—unlike now.
Stiglitz, once the World Bank’s chief economist and an adviser to the Clinton administration, is currently an economics professor at Stanford University. He said the “immediate future” looks like “a dismal picture”.
He was voicing his thoughts on the eve of the October 14 publication of a paperback version of his book, Freefall: Free Markets and the Sinking of the Global Economy. He described how, “Events have (sadly) unfolded much as expected: growth has remained weak, sufficiently anaemic that unemployment has remained stubbornly high; mortgage foreclosures have continued apace and, while bank bonuses and profits have been restored, the supply of credit has not, even though the resumption of credit was supposedly the reason for the bank bailout.”
Stiglitz criticised “the extent of the banks’ fraudulent and unethical practices” and the way that they have been able to water down new regulations to the extent that “the prospect of another crisis down the road remains not insignificant.”
“We have bought ourselves a little extra time before the next crisis”, he stressed.More Here..