Sunday, October 30, 2011

Jeffrey Sachs Lets Cat Out of Bag


World-renknowned economist Jeffrey Sachs who, among other things, administered shock treatment to one of the Eastern European countries after the dissolution of the Soviet bloc, has now come to realize that this is not the right path. He supports the OWS movement.

On Fareed Zakaria's GPS today he stated clearly that countries need a mixed economy, a collaboration between government and business.  He duked it out calmly but convincingly with British conservative economist Niall Ferguson, a leading proponent of the argument that the 1% create jobs, and a regular on GPS.

I have been waiting for a long time for someone authoritative to come out of the closet on this, and Sachs made my day.  He stated that other developed countries, including those in Europe, having significantly higher tax rates than the U.S., which allows their governments to invest in infrastructure, education, health, and housing.

Having lived in half a dozen European countries (on both sides of the then Iron Curtain) I have been trying to get this message across to my compatriots.  But who am I?

Here is an excerpt from Sach's bio as it appears on the home page of the Earth Institute at Columbia University,

"Jeffrey D. Sachs is the Director of The Earth Institute, Quetelet Professor of Sustainable Development, and Professor of Health Policy and Management at Columbia University. He is also Special Advisor to United Nations Secretary-General Ban Ki-moon. From 2002 to 2006, he was Director of the UN Millennium Project and Special Advisor to United Nations Secretary-General Kofi Annan on the Millennium Development Goals, the internationally agreed goals to reduce extreme poverty, disease, and hunger by the year 2015. Sachs is also President and Co-Founder of Millennium Promise Alliance, a nonprofit organization aimed at ending extreme global poverty.

Professor Sachs is widely considered to be the leading international economic advisor of his generation.  For more than 20 years Professor Sachs has been in the forefront of the challenges of economic development, poverty alleviation, and enlightened globalization, promoting policies to help all parts of the world to benefit from expanding economic opportunities and wellbeing.  He is also one of the leading voices for combining economic development with environmental sustainability, and as Director of the Earth Institute leads large-scale efforts to promote the mitigation of human-induced climate change."

Ironically, Zakaria chose to end his program with the news that Argentina's president, Cristina Fernandez de Kirchner, was reelected by a landslide, after continuing her dead husband's social democratic economic policies.  The Nestor de Kirchner brought the party that grew out of the Peronist movement into the Socialist International.

Under the two Kirchners, Argentina went in ten years from a failed economy to 9% annual growth.  Zakaria felt obliged to close on a familiar note of warning: inflation is creeping up in Argentina, and soon it will be time for a reckoning.

I am not an economist, but I would bet that economists like Joseph Stiglitz and Paul Krugman would tell Zakaria that it is possible to tinker with the system to prevent inflation from getting out of control.

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