Stiglitz Offers Little Lessons in History

The Buffalo News
Sunday, November 9, 2003


The Roaring Nineties
By Joseph E. Stiglitz
256 pages, $25.95

It's been shown that certain people will pay huge sums for a one-hour lunch with Warren Buffett, where they probably get a few nuggets of wisdom in the investing guru's trademark folksy style.

So for those looking for the ultimate insider's perspective on the last decade's roller-coaster economy, who wouldn't want to get a book's worth of insights from Joseph E. Stiglitz, winner of the Nobel Prize for Economics, former chairman of President Clinton's Council of Economic Advisers and chief economist at the World Bank, and author of the prescient "Globalization and Its Discontents"?

Unfortunately, anyone looking for an insightful one-on-one with the man who helped shape "The Roaring Nineties" is out of luck. Instead, you're stuck at the longest cocktail party in history, hearing vague and tedious "if only" stories from a man with a serious ax to grind.

Stiglitz's attempt at "a new history of the world's most prosperous decade" isn't really that at all. Instead, we follow the lauded economist through most every policy issue that came across the Clinton administration's desk, and we learn that even one of the most prestigious and noble jobs in the country has its share of rote and occasional insignificance.

Here's how it goes in a typical chapter: issues of great import, about, say, accounting regulation or telecom deregulation, come across the Council of Economic Advisers' desk; Stiglitz looks at the recent history of the issue, focusing on the damage done by "the previous 12 years of policy" (aka Ronald Reagan and George Bush); he and the advisers make a sound, forward-looking proposal; the advisers are then ignored.

Stiglitz does at least attempt an honest retelling of extremely familiar material, faulting Clinton often for giving in to the conservative thinking prevalent at the time and relying on economic welfare to right society's wrongs, while also getting in a flurry of jabs at the Treasury Department, Alan Greenspan, Congress and other tall opponents.

But we get little or no insight into why or how they specifically brought about the reckless soaring and inevitable crash of the market, other than not listening to that helpful chairman. Sure, Stiglitz offers up alternative courses for everything, especially policies with developing nations, but he doesn't so much punctuate his arguments with opinion as he brackets them with "I doubt," "It's possible," and his personal favorite, "mistakes were made."

In "Globalization," written immediately after he left the World Bank, Stiglitz showed a reassuring skill for non-partisan critique, followed by a broad but well-defined philosophy for social justice. With "The Roaring Nineties," he offers a view from way on high of who's to blame for the decade's "irrational exuberance," offers lessons in "How to Mismanage the Economy" that make George W. Bush out to be some sort of monetary Dr. Evil, and then offers an annoyingly vague vision "Toward a New Democratic Idealism."

One can imagine having an actual cocktail with Stiglitz might shake loose a searching, biting tale of the whos, whats and whys of the curious '90s. Instead, it's as if we're hearing it second-hand, from an avid Economist reader who knows Stiglitz well.

Kevin Purdy is a News financial reporter.