Freefall: The Economic Crash
It’s been the most severe economic crisis since the Great Depression. And it isn’t over. Chronic long-term unemployment remains high. The state of many states, cities and towns is dire. Crippling budget cuts result in drastic reductions in services and hikes in such things as tuition fees. And on the housing front? The bubble that burst. More than ten million homeowners are underwater, that is, they owe more on their mortgages than their house is worth. Politicians glibly talk of those well paying jobs with benefits coming back. Who are they kidding? That’s not going to happen. The manufacturing sector is eviscerated. What’s left? Consumption. Consumer spending now accounts for 70% of the GDP. Meanwhile, while many citizens suffer, the war machine goes on its merry way. The Pentagon budget is at record levels. The war on Iraq alone will cost $3 trillion.
Joseph Stiglitz, a professor at Columbia University, is the recipient of the Nobel Prize in Economics. He was chair of the Council on Economic Advisors under Clinton. He also served as senior vice president and chief economist of the World Bank. His efforts to move the bank in a more progressive direction got him fired. He is the author of Globalization and Its Discontents, The Price of Inequality and People, Power, and Profits.