Soros to Spend $50M to Reinvent Economics

But Wall Street bailout has made it a dirty word, writes economist

(NEWSER) - Pundits can't help but ask whether the winter's fiscal stimulus has failed, and for Joseph Stiglitz it has—because the Obama administration made "political compromises that caused it to be less effective than it could have been." For the Nobel Prize-winning economist, there is no option but a second stimulus to stand in for dampened customer demand. "Not preparing for a second stimulus now risks a weaker economy," he writes: "more bankruptcies and home foreclosures and higher unemployment." More»

Bad decisions starting in the '80s triggered the credit crisis

(NEWSER) - This financial crisis brewed over decades of bad decisions, and, in Vanity Fair, economist Joseph Stiglitz makes sure credit is given where due:

• In 1987 President Reagan appointed anti-regulation Alan Greenspan to a regulatory post.
• Greenspan offered the markets a "flood of liquidity" that boosted inflation and caused two financial bubbles.
• The Glass-Steagall Act was repealed in 1999, allowing commercial banks to become high-risk borrowers.

Skilled immigrants would help end slump, he says

(NEWSER) - Alan Greenspan said housing prices could continue to edge lower through 2009, but should “stabilize or touch bottom” in the first six months of the year, reports the Wall Street Journal. And, the former Fed chief says, while a government bailout of Freddie Mac and Fannie May was the right thing to do, the companies should have been nationalized. More»

Market capitalism can ride out the crisis, writes former Fed boss

(NEWSER) - The credit crisis is far from over, and more banks and financial institutions might require government bailouts along the way, Alan Greenspan acknowledges. The crunch will relax only when home prices, "the ultimate collateral support for much of the financial world’s mortgage-backed securities," begin to stabilize, the ex-Fed chairman writes for the Financial Times. Until then, governments must resist the temptation to respond to the downturn with heavy-handed regulation. More»

Rejection of stimulus a big mistake: investor

(NEWSER) - Worry no longer about an impending double-dip recession—it’s already here, says George Soros. “I think we are in it already,” the billionaire investor told CNBC , citing Republicans’ rejection of fiscal stimulus as a key problem. “We have a slowdown and basically a conflict about whether the rich ought to pay taxes to create jobs or not,” he said. A scuttled deal in Washington “would have balanced the budget over the long term, but would have allowed short-term fiscal stimulus, which would have been the right policy,” he noted. More»