Joseph Stiglitz, a nobel prize winning economist and former chairman of President Clinton's council of economic advisers, has another opinion piece in the Guardian critical of Bush's handling of the US economy. Here he is blaming the Bush tax cuts for creating the US deficit:
America's burgeoning trade deficit is a result of Bush's unprecedented mismanagement. Tax cuts that the US could ill afford turned a huge fiscal surplus into a massive deficit...
This comes less a month after Stiglitz devoted a whole article critical of Bush's tax cuts in the same forum.
Here's the truth of the matter from Dean Baker, co-director of the Center for Economic and Policy Research, writing in his weekly newsletter:
According to the Congressional Budget Office, the main reason for the shift from surpluses to deficits is a falloff in tax revenue due to the recession and the corresponding collapse of the stock market. Higher than projected spending accounted for $60 billion of a $333 billion shift towards deficits in the 2002 fiscal year; all but $27 billion of this additional spending was defense-related. Tax cuts added $32 billion to the deficit, as compared to the baseline projections made in January of 2001. The rest was attributable to lower than expected tax revenue.
In other words, to quote James Carville: "It's the economy stupid."
Mr. Stiglitz's impressive credentials suggest he's too sharp to have failed to understand the various factors that have contributed to America's federal budget having swung into deficit. He unfortunately appears to be following in Paul Krugman's footsteps, bending his considerable intellect towards partisan ends and sullying his reputation in the process.
About a year ago Brink Lindsey, a trade lawyer and fellow at the Cato Institute, had this to say about about Mr. Stiglitz's recent book about globalization:
As that excerpt makes clear, I think this is a bad book. A very bad book. A scholar of Stiglitz's standing should be ashamed of himself for having written it. It's slanted, intemperate, and factually and analytically sloppy to the point of mendacity.
The same could be said of Mr. Stiglitz's pontifications in the Guardian.
Speaking of Brink Lindsey, I sure hope he decides to call an end to his blogging hiatus. Maybe some e-mails from fans of his blog could entice him back.