A Quote by Joseph Stiglitz
The roots of the crisis in East Asia were in private sector decisions. The biggest problems were the misallocation of investment, most notably to speculative real estate, and risky financing, especially borrowing short-term debt on international markets.
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Until you separate the speculative behaviour of the financial sector from the real economy and the financing of the real economy, then we are not going to see the kind of stability or the capacity to drive genuine, income-led growth as opposed to debt-fuelled, speculative behaviour.
The dominance of short-term perspectives has led to routine decisions in the markets that sacrifice the long-term buildup of genuine value in pursuit of artificial, short-term gains.
Today the strategies of many companies in the real estate industry are premised on low interest rates, an assumption that has resulted in the rapid expansion of the real estate securitization business. This trend could be regarded as a risk factor, as it exposes the real estate sector to at least three potential problems: first, interest rate hikes; second, revisions to securitization business accounting standards; and third, overheating in the real estate market.
Deflation is a leakage from this circular flow, to pay banks and the real estate, called the FIRE sector - finance, insurance and real estate. These transfer payments leave less and less of the paycheck to be spent on goods and services, so markets shrink.
Billy not only had a distinguished career in the Legislature, but he also has great business instincts and has done exceedingly well making investment decisions in both stocks and private ventures such as real estate.
Canadians know that the promise of a recession didn't happen because of anything we did here. If you look at all the causes of the recession, problems in mortgage markets, the problems in the banking sector, the problems in government finance in countries like Greece, none of those problems were in present Canada.
The markets are much more interested in America's long-term trajectory than they are in feeling that there is an acute short-term crisis.
No amount of debt restructuring, even debt forgiveness, will help the Greeks achieve real prosperity. What they need is not short-term relief but, rather, a long-term cure.
Major investment decisions have become too important to be left to the private sector.
One of my problems, so to speak, is that, in America, we tend to think in relatively short-term. In the Middle East and Asia and other parts of the world, they think in terms of centuries or 500 years or 1,000 years.
There are many reasons that universities in East Asia have not reached the positions that they had hoped for. After all, we must remember that modern East Asia did not begin with Confucius. In fact the experience of modern education in East Asia is relatively short and granted that time scale, many universities are doing fine.
When I first saw China, there were no automobiles. There were no supermarkets. There were no high-rise buildings. There were no consumer goods. There were no restaurants that were at least accessible that foreigners could see. It was a Stalinist society, and a very poor Stalinist society. So the economic system has totally changed, and the private sector in the economic system is now the dominant sector. It didn't exist at all as late as 1979.
The biggest difference between the private sector and public sector is in the private sector, there's a sense of urgency because you have customers and you have competitors. Whereas in government, one of your major objectives is to not make any really big mistakes.
The Tea Party elites believe government is evil. Everything about government is bad, and they blame all problems, even non-economic problems, problems that were caused by the private sector, on government.
Borrowing isn't inherently bad; it depends a lot on what the debt is financing.
We have Christians against Muslims against Jews. They're making incompatible claims on real estate in the Middle East as though God were some kind of omniscient real estate broker parsing out parcels of land to his chosen flock. People are literally dying over ancient literature.
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