Crisis Prophet

Stiglitz is right about one thing - he's no great genius. Has he ever met a regulator? They don't have a clue what the entities they regulate actually do. If they were smart enough to figure it out, they would work for the entity rather than the regulator and make more money.

Sadly, we got a trifecta of war, collapse, and terrorism.

Why sadly? All of these things have been a part of the human experience for time immemorial and there's almost always a trifecta of war, collapse and terrorism somewhere in the world. Why are people constantly shocked by these things?

Strangely he calls for more regulation, but completely ignored where the money came from. Its like the banks got greedy with capital sent by Jehovah God from the sky.

So what happens to "pessimistic bias" now?

It's quite curious how everybody -no matter of what they stand for- claims to have predicted the present crisis.

Personally, I tend to be skeptical about these I-said-it-long-time-ago. And this case is evident: if I knew that we were getting into a disastrous situation like this, I would have been asking for a solution long time ago. I would have written to politics, newspapers and so on. As far as I know, Mr. Stiglitz didn't.

You might object to his implied solutions and to his overall view of the world, but you have to admit that the block quote Stiglitz reprints here is spot on. Neither the blog post, nor the comments provide any argument to suggest otherwise.

The criticism I see here seems to be based on intellectual clan warfare, not rational critical thought.

Stiglitz shows no particular foresight. Crises happen and economists rightly predict that we could've avoided them if we'd handled things better (exactly how we could've handled thing better is up for debate). All Stiglitz has shown is that he thought back then that under-regulation would cause problems. Now he still thinks that under-regulation has caused problems. The Stiglitz of today agrees with the Stiglitz of 20 years ago. He's reading the same bias into the situation 20 years ago that he sees now. All he's demonstrated is that he agrees with himself. This doesn't show that he's a prognosticator.

All that ultimately matters is whether his analysis of the problem is right or wrong. Is it under-regulation? Could we have solved the problem with the type of regulation he recommended? Perhaps. If we knew what was best and precisely what the future would bring. Alas, we don't. And this should teach us some humility instead of the self-congratulatory "I told you so," that Stiglitz is indulging in.

So I guess that Stiglitz has been holding cash all these years just waing for this to happen and now he will get rich.