Joseph Stiglitz

The Bush administration has been doing everything it can to hide the huge number of returning veterans who are severely wounded - 17,000 so far including roughly 20 percent with serious brain and head injuries. Even the estimate of $500 billion ignores the lifetime disability and healthcare costs that taxpayers will have to spend for years to come.

Even if Bush could be forgiven for taking America, and much of the rest of the world, to war on false pretenses, and for misrepresenting the cost of the venture, there is no excuse for how he chose to finance it. His was the first war in history paid for entirely on credit. As America went into battle, with deficits already soaring from his 2001 tax cut, Bush decided to plunge ahead with yet another round of tax \"relief\" for the wealthy.

There will come a moment when the most urgent threats posed by the credit crisis have eased and the larger task before us will be to chart a direction for the economic steps ahead. This will be a dangerous moment. Behind the debates over future policy is a debate over history-a debate over the causes of our current situation. The battle for the past will determine the battle for the present. So it\'s crucial to get the history straight.

One has to always ask the question: Where can one be most effective in helping shape policies? It is always difficult when you\'re inside because you\'re very constrained.

Much of my work in this period was concerned with exploring the logic of economic models, but also with attempting to reconcile the models with everyday observation.

I don\'t think if we had been able to make that choice rationally, we would have said that\'s what we want to do. We would have said: \"Can\'t we save the banks and solve our health care problems?\" The answer is yes. You could have.

China\'s accumulation of reserves is a result of the IMF\'s mismanagement of the Asian financial crisis a decade or so ago. If countries know they can\'t rely on the IMF to help them, their best defense is their own reserve cushion. In a time of spreading global recession, too much emphasis on savings in surplus countries like China can impede prospects for global growth.

Policies seemed almost deliberately designed to suppress new enterprise and job creation. How many Americans will start a business if the interest rates are 150 percent?

Capital market liberalization includes freeing up deposit and lending rates, opening up the market to foreign banks, and removing restrictions on capital account transactions and bank lending. The focus is on deregulation, not on finding the right regulatory structure.

We could, of course, always make the payments, simply by printing more money - we simply promise to pay people by giving them dollar bills - but that could set off inflation.

If you destroy a firm, you can\'t pull it out of bankruptcy overnight.

I find it scandalous not only that there was so little discussion of the costs of the Iraq war before we went to war - this was, after all, a war of choice - but even five years into the war, the Administration has not provided a comprehensive accounting of the war.

The problem with NAFTA was with what we wanted. And there, the agenda had been set by our corporations. So what is true is that workers in the United States and workers in the developing countries were often disadvantaged. They were worse off. The big winners were our corporations.

One of the real costs of the war is that our security is actually less than it otherwise would have been - ironic, since enhancing security was one of the reasons for going to war. Our armed forces have been depleted - we have been wearing out equipment and using up munitions faster than we have been replacing them; the armed forces face difficult problems in recruitment -by any objective measures,including those used by the armed forces, quality has deteriorated significantly.

I don\'t think anybody really thinks that one should get rid of the World Bank. Reform is one thing, but getting rid of it I think would be wrong.

In a globally integrated economy, the biggest challenge is to make sure there is adequate global aggregate demand, achieved through spending, when countries like China feel they must save high levels of dollar reserves to protect against international currency volatility.

When you\'re facing the threat of recession, you need to have an expansionary monetary and fiscal policy. Pre-Keynesian, Hooverite views are dead everywhere except on 19th Street in Washington.

The country has large unfunded liabilities - social security, health care, and there will have to be some adjustments to these problems. What is scary though is how much worse things have gotten in the last eight years, and the Iraq war is one of the main factors.

These debt obligations will simply erode America\'s standard of living in the future. Money spent to service the debt is money that we don\'t have to spend on consumption\'s goods, or on investment in our future.

World War II was really unusual, because America was in the Great Depression before. So the war did help the US economy to get securely out of this decline. This time, the war [in Iraq] is bad for the economy in both the short and long run. We could have spent trillions in research or education instead. This would have led to future productivity increases.

I think what they\'ve been doing is largely almost in firefighting mode without a good conceptual framework - either at the micro or the macro level. Micro, you would ask: \"What kind of financial or banking system do we want?\" Macro, you would say: \"What are the underlying problems in the structure of our economy?\"

Economically, we are gain weaker. Millions of Americans have no health insurance - including many poor children. if they do not get the care they need, they may become scarred for life; but the President George W. Bush vetoed the children\'s health insurance bill - evidently we couldn\'t afford it. But we were talking about just a few days fighting in Iraq.

The international institutions go around the world preaching liberalization, and the developing countries see that means open up your markets to our commodities, but we aren\'t going to open our markets to your commodities. In the nineteenth century, they used gunboats. Now they use economic weapons and arm-twisting.

Fortunately, America remains a robust democracy, where most individuals are not afraid to speak out. What we have done in Iraq has, however, compromised out standing as an advocate of basic human rights - the prime minister of one country responding to criticism of America for its human rights put it, it was liking having Dracula guard the blood bank. The loss of America\'s moral standing has been one of the great losses of this war.

The analysis in the era of Ronald Reagan and Margaret Thatcher was that government was interfering with the efficiency of the economy through protectionism, government subsidies, and government ownership. Once the government \"got out of the way,\" private markets would allocate resources efficiently and generate robust growth. Development would simply come.

The fact that the government had to put up hundreds of billions of dollars to Citibank in guarantees was a public declaration that Citibank was a mess. Making Citibank go through financial restructuring would not have conveyed any more different information. So it\'s very hard to see why it would have had that kind of a panic if it were done well.

We noted the psychological problems facing many of the returning from Iraq veterans - of the 700,000 returning veterans, more than a 100,000 have been diagnosed with problems, but the numbers are likely to get worse, as those with multiple deployments return. We should have valued the loss of life as a result of these suicides, using the same procedures we used for the loss of those who died in combat.

What Trump has announced - that he is going to not obey rules by which we govern our relations with other countries. He\'s going to reject the treaties that we have had in the past. He is going to go from what is called a multilateral system, where we all work together, to trying to deal country by country and basically throw out what has been achieved over a 60-year period.

There is a clear and strong link between the economy\'s present woes and the Iraq war. The war was at least one of the factors contributing to rising oil prices - which meant Americans were spending money on imported oil, rather than on things that would stimulate the american economy. Hiring Nepalese contractors in Iraq, moreover, doesn\'t stimulate the American economy in the way that building a school in America would do - and obviously doesn\'t have the long term benefits.

The grand larceny that occurred in Russia, the corruption that resulted in nine or ten people getting enormous wealth through loans-for-shares, was condoned because it allowed the reelection of Boris Yeltsin.