IN BANGKOK
WHEN he speaks the formidable Joseph Stiglitz, 66, is definitely heard.
The American economist and professor at Columbia University – one of the best minds of our times and awarded the Nobel Prize for Economics in 2001 – spoke at the UN in Bangkok on Friday at a UNESCAP-hosted lecture themed "The UN System and Economic Crisis: Towards a New Global Financial and Economic Architecture."
Professor Stiglitz, known for his criticism of conventional free-market-led economic development, globalization and gross development product (GDP) measures, recently took up the chairmanship of a panel set up by French President Nicholas Sarkozy, tasked with developing new indicators for economic growth that will include measures of quality of life alongside traditional numerical indicators of production and output.
In his talk he delivered a scathing critique of the US Government's bailout of large banks and corporations, saying the trillion-Dollar measures had destroyed the level playing field, benefitted only a select few, and failed to address underlying problems.
Reeling off instances of bank failures and bailouts over the decades and around the world, he said financial institutions which had an "enormous history of incompetence" had been allowed to blackmail the US government into bailing them out.
The result was large banks which were more often "involved in gambling, not lending" had been saved from collapse – but smaller ones which had a more critical and effective role in firing the real economy, had been allowed to fail.
He called for a new global reserve fund which could be an amalgamation of regional funds like the Chiang Mai Multilateral Initiative which ASEAN governments have been working on as a collective hedge against currency fluctuations.
Later after the lecture Professor Stiglitz met with a few journalists, where he gamely took questions well beyond the time limit set by his UN handlers, and had some advice for Asia.
Listen to Professor Stiglitz's critique of the bailouts.
And why Professor Stiglitz is not confident of a robust recovery, and his advice for Asia.