At the Daily Howler, Bob Somerby decodes the snotty condescension that substitutes for a real review of the book. Looking down her nose, Michiko Kakutani just cannot stick to the economics.
At the Daily Howler, Bob Somerby decodes the snotty condescension that substitutes for a real review of the book. Looking down her nose, Michiko Kakutani just cannot stick to the economics. Is it "populist" to have a distaste for Too Big to Fail and the Lemon Socialism of Heads Big Banks Win and Tails the Taxpayer loses??? I do not know of one hedge fund manager or Ivy League educated policy official who will argue in favor of such an environment. Perhaps Kakutani stands alone above us all, financiers and scholars included, with our dirty and unwashed distaste for subsidies to the rich and powerful.
Shame on you Kakutani. For such a mindless constellation of smears.
WEDNESDAY, JANUARY 20, 2010
From Kakutani's hive: In yesterday's New York Times, Michiko Kakutani reviewed Joseph Stiglitz's new book, Freefall. It seemed to us that she probably did a good job summarizing Stiglitz's views about (as expressed in the book's subtitle) "America, Free Markets, and the Sinking of the World Economy."
That said, we were struck by the swarm of buzzwords which kept flying in from some mainstream press hive. This is how the review began. Why is that one buzz-word in there?
KAKUTANI (1/19/10): In a November 2008 Op-Ed article for The New York Times, the Nobel Prize-winning economist Joseph E. Stiglitz wrote that a huge stimulus package -- as much as $1 trillion over two years -- was needed to turn the Great Recession into a robust recovery and that new regulations were needed to change the destructive behavior of Wall Street that had brought about the fiscal calamities in the first place.
Some four months later, he wrote another Op-Ed piece for The Times in which he assailed the Obama administration's plans for dealing with ailing banks, arguing that it was "a win-win-lose proposal: the banks win, investors win-and taxpayers lose." He went on to characterize the administration's approach as "ersatz capitalism, the privatizing of gains and the socializing of losses."
Mr. Stiglitz's new book, "Freefall: America, Free Markets, and the Sinking of the World Economy," expands these populist arguments further.
Our question: Why did she stick the word "populist" in there? What was gained by that insertion? If you asked a hundred Times readers what the word means, you'd surely get two hundred answers. Why wouldn't a reviewer simply say that Stiglitz expanded these arguments further? Was Kakutani giving herself distance from Stiglitz's views? We couldn't help wondering.
Was she staying a "Serious" person?
We wondered that as we started to read -- but my, how the buzz-words continued to fly! As noted, Kakutani seemed to provide good summaries of Stiglitz's views. But soon, we started again:
KAKUTANI: Before the deadly autumn of 2008, Mr. Stiglitz was one of the handful of economists who had been "expecting the U.S. economy to crash, with global consequences," and in this book his prescience lends credibility to his trenchant analysis of the causes of the fiscal meltdown, though it also leads, at times, to an I-told-you-so sanctimoniousness about both the recession and Washington's response.
"I suspect that if the government adopted the simple proposals of this chapter, the foreclosure problem would be a thing of the past," he writes. "But regrettably, the Obama administration has followed the course of the Bush administration, directing most of its efforts at rescuing the banks."
Was that quotation supposed to provide an example of Stiglitz's "I-told-you-so sanctimoniousness?" We can't imagine what would be gained by such an odd claim -- unless Kakutani gains a bit of eye-rolling distance from Stiglitz's plainly non-Serious views. Soon, she went there again:
KAKUTANI: Like the Times columnist Paul Krugman, Mr. Stiglitz reminds the reader that America was spared major financial crises in the decades following World War II, when ''there were strong regulations that were effectively enforced.''
As memories of the Great Depression receded, however, deregulation became increasingly fashionable -- not only under the Republican administrations of Ronald Reagan and the two Bushes, but also during the tenure of Bill Clinton. Mr. Stiglitz, a member of Mr. Clinton's Council of Economic Advisers and later chief economist for the World Bank, frequently criticized the Treasury secretary at the time, Robert E. Rubin, and his successor Lawrence H. Summers, for their deregulatory policies; in these pages, he questions President Obama's decision to make Mr. Summers his chief White House economic adviser and to name Timothy F. Geithner (who worked under Mr. Summers and Mr. Rubin in the Clinton administration) treasury secretary.
"Obama chose this team," says Mr. Stiglitz, who writes with what sounds like a touch of sour grapes,"in spite of the fact that he must have known -- he certainly was advised to that effect -- that it would be important to have new faces at the table who had no vested interests in the past, either in the deregulatory movement that got us into the problem or in the faltering rescues that had marked 2008, from Bear Stearns through Lehman Brothers to A.I.G."
What is gained by that highly subjective insertion? Why isn't Stiglitz simply asserting his (perfectly reasonable) view? By the way: We're always impressed when a writer's nose is so fine that it can detect just a touch of sour grapes, not a full dose of the fragrance.
Kakutani goes on to offer a puzzling claim, seeming to say that Stiglitz's proposal for "more progressive taxation" "stray[s] far from the realm of practical policy recommendations that actually have a chance of winning broad public support or being enacted by Congress." As she closes, she warns that these impractical proposals "give ammunition to conservative critics who want to dismiss Mr. Stiglitz as a European-style liberal." Let a million buzz-words bloom!
For the record, Stiglitz isn't just "a Keynesian." He writes "as a proud Keynesian, and his analysis of the recession of 2008 and its aftermath reflects his overall philosophy."
In November 1999, Kakutani showcased her remarkable skill at forcing High Manhattan Conventional Wisdom, no matter how daft or irrelevant, into reviews of political books. (For part 1 of our four-part series, see THE DAILY HOWLER, 11/29/99). In this review, she seems to summarize Stiglitz well. But along the way, an army of buzz-words swarms from a hive. Is Kakutani letting us know that we should hold our distance from these non-Serious views?
Rob Johnson is a Senior Fellow and the Director of the Project on Global Finance at the Roosevelt Institute.