El Gran Malestar continúa

Jan 3, 2016 Joseph E. Stiglitz

NUEVA YORK – El año 2015 fue difícil en todas partes: Brasil entró en recesión; la economía china sufrió sus primeras sacudidas graves después de casi cuatro décadas de crecimiento vertiginoso; la zona del euro se las ingenió para evitar el colapso debido a Grecia, pero su virtual estancamiento se mantuvo y aportó a lo que probablemente será considerada una década perdida; para Estados Unidos, se esperaba que en 2015 finalmente se pusiera fin a la Gran Recesión que comenzó allá por 2008, en lugar de eso, su recuperación ha sido regular.

De hecho, Christine Lagarde, directora gerente del Fondo Monetario Internacional, ha bautizado la situación actual de la economía mundial como la Nueva Mediocridad. Otros evocan el profundo pesimismo posterior a la Segunda Guerra Mundial y temen que la economía mundial decaiga hasta entrar en recesión o, al menos, mantener un prolongado estancamiento.

A principios de 2010, advertí en mi libro Caída libre –que describe los eventos que condujeron a la gran recesión– que sin respuestas adecuadas, el mundo corría el riesgo de caer en lo que llamé el Gran Malestar. Desafortunadamente, estaba en lo cierto: no nos ocupamos de lo que hacía falta y terminamos exactamente donde temí que lo haríamos.

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Joseph E. Stiglitz

Writing for PS since 2001
326 Commentaries

Joseph E. Stiglitz, a Nobel laureate in economics and University Professor at Columbia University, is a former chief economist of the World Bank (1997-2000), chair of the US President’s Council of Economic Advisers, and co-chair of the High-Level Commission on Carbon Prices. He is Co-Chair of the Independent Commission for the Reform of International Corporate Taxation and was lead author of the 1995 IPCC Climate Assessment.

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0 Comments on this paragraph, 47 Comments on this article

Ben Leet Feb 7, 2016

Marriner Eccles, Chairman of the Fed, made this argument in the 1930s. The rich have deprived their customers of purchasing power by monopolizing too much income. When the players at a poker game run out of credit the game is over. Keynes wrote a public letter to Roosevelt in January 1933 stating much the same. The U.S. has $85 trillion in private household savings, net worth. It lies idle. That is $700,000 for all 120 million households. We are very rich, but investment is constrained due to lack of demand. Half of all households own 1.1% of wealth, Congressional Research Service.
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LAXMIDHAR N BHOLA Jan 14, 2016

if BRICS member nations do business by currency swaps among inter-BRICS, some sort of breakthrough innovation, or market shaking may be forthcoming, And History of trade behaviour and Dollars' Hegemony indicate that. Because, shadow warfare cannot manage the global market for so long under the same 'strategic weapon'! this is as per my crude /and tacit based approach to understand 'market dynaics under the influence of Dollar'!
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george sos Jan 12, 2016

Hopeful might not be the economic future for 2016,but having great thinkers like JS expressing their anger (together with many others) for the corrupt banksters ,makes one hopeful for a global change might after all be possible.Not all have been sold out to the greedy vultures .
Big up JS.
Humanity has a big fight in front of it.A fight with herself(humanity is a "she" ,isn't she?:):)).
Good luck to all the innocent bystanders who d die while the gangs fight to secure the last resources on earth for their private use and gain.
Just like they do today with all the nice spots that are left untouched/unpolluted by their "growth"on earth.
And if they can not buy it,thy will extort it out of you....(Greece comes to mind again).
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Tamer Kirac Jan 11, 2016

Nothing new.

Stiglitz's commentary neglects to reference the "Global Malaise" associated with alarmingly increasing income disparities in nations and among nations and potential border conflicts in Asia and Middle East and to an extent in Europe.

Some call it the Perfect Storm. We'll surely get to see it, live it!
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Emilio Zuniga Jan 11, 2016

The Great Malaise is more in the European side with its failure and incapacity to apply conventional Keynesean responses to a deep recession. Also in the Chinese style of growth that created the commodities price bubble. To adjust 10% rate of growth to 5-6% is hard landing and given the sise of the Chinese economy it is bound to depress the world economy. To fix this economy takes time, and first it comes the Pain.
As for the emerging economies, those countries that applied populist measures to reduce poverty like Brazil, South Africa, Argentina, Venezuela, un like México, Chile, Perú, Soth Korea and others are in deep trouble. It is not the lack of diversification, it is the lack of public responsability.
Insufficient global demand yes, but no doubt in Europe as in China and other emerging countries it must go hand in hand with structural reforms.
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Robert REYNOLDS Jan 11, 2016

A clear, lucid and insightful piece.

In response to the point, "While our banks are back to a reasonable state of health, they have demonstrated that they are not fit to fulfill their purpose. They excel in exploitation and market manipulation; but they have failed in their essential function of intermediation." I would suggest that the only policy to address the egregious behavior of the banks is to nationalize them. For a democratic socialist like myself, this course of action is blatantly obvious.

Joe reminds us of the lamentable damage done to economies around the world by the laissez-faire free-marketeers with his statement that, "The obstacles the global economy faces are not rooted in economics, but in politics and ideology." Thanks to these free-market economic fundamentalists and zealots, I am in little doubt that when I leave this world it will be in a noticeably worse state than when I entered it. I have grave reservations for my children and grandchildren.
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wolfgang price Jan 10, 2016

What is the great malaise? Whatever it is Stiglitz and some of the comments seem to know the causes and contrary to Sriglits claim for omniscience "my book freefall" there is nothing that is Econ 1 materials viz., more demand, more consumer income (income distribution), more deficit spending (alo Krugman), more infrastructure spending (also Krugman), etc. all summing up to more GDP. It is 'growth economics'. It is 'consumer economics'. Economics has come to make us live in 'angst' from GDP numbers. Yikes. China is down... Oi, Oi!
Is this the great insight into the source for 'economic malaise? we have to restore consumer gratification. Produce more cars. Well in transforming economy these will need even less labor and all means for cars on demand and robot cars will vastly reduce reckless use of natural and human resources.

There is a transformation in progress. GDP is hardly an adequate measure for evolving means for improvements in quality of life. US with its GDP fails to rank in health and education. GDP doesn't measure the 'sharing economy'. At-hand are vast changes in logistics. Fleets of robot trucks stocking robot warehouses.

Underway is a total transformation of the economic order. If there is malaise it is from a breath in the frantic pace from that transition.2050 will see 40 million robots moving about. And these will not be lazy.

It is not malaise that Stiglitz should contemplate. Rather, how do we improve the quality of human well-being in a society where we have untiring 'servants' to produce most of the goods and services of so-called needs in the GDP market?
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Kenneth Pao Jan 10, 2016

Thank you professor Stiglitz for an article that sheds some light on what the world's major economies needed to do to get the world going again. Let's hope the Democrats and Republicans 2016 major candidates' economic advisors are paying attention. We can only pray that they agree with you.
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Charles Estes Jan 10, 2016

Politicians are not going to increase budget deficits to fund infrastructure or anything else these days because they are afraid of increasing their national debts. But this is not necessary. When aggregate demand is so low, governments should cooperate with their central banks to have the latter direct fund deficits with newly created money. This won't cause inflation when the deficits are run during slack economic times. Until big-name economists join Adair Turner in talking about this, the world economy is going to remain in a rut. Incidentally, these deficits could fund efforts to combat climate change, thereby dealing with our biggest problem while helping in the short run too.
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E Walker Jan 10, 2016

Of course Professor Stiglitz is absolutely right about the state of things. I'd add the debt problem, which keeps people from consuming as they pay for what once were public goods: mainly education and health care. Education was publicly funded, so the young did not have to worry about money, merely their education, and parents did not have to worry about the costs of college. Health care was non-profit, so the medical business did not have to produce constantly rising profits. Now both are debt traps, and millions are ensnared.

This is directly a problem of politics driven by a horrible economic theory: the unrestrained free market driven by greed and corruption. Or, in one word: neoliberalism.

It is not only the problem, it prevents the solution.
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Odyssios Redux Jan 10, 2016

In exchanging jobs in the manufacturing economy for those in the service, well-paying jobs with reasonable benefits have been exchanged for far lower-paying jobs and greatly reduced benefits. And opportunities for consumption. This is not going to change any time soon. It could - to great benefit, by for instance massive, and essential, infrastructure expenditure. But the economic fundamentalism of austerity , and effective ungovernability of the US in its current political dispensation, makes this very unlikely; and manufacturing jobs are not returning - except perhaps where they've been automated. But welding robots are not good consumers. They don't even need caregivers in old age, having short lifespans. This might be a good opportunity to examine the ecologically unsustainable model requiring ceaseless increase in consumption - but the opportunity isn't being taken. It will be amusing to see what future historians make of all this utterly needless misery.
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Per Kurowski Jan 10, 2016

Professor Stiglitz. Until the world rids itself of distortionary bank regulations that doubles up on ex ante perceived credit risks, The Great Malaise is doomed to continue

http://subprimeregulations.blogspot.com/2016/01/joseph-stiglitz-until-world-rids-it.html
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Pingfan Hong Jan 9, 2016

"The world faces a deficiency of aggregate demand, brought on by a combination of growing inequality and a mindless wave of fiscal austerity": is the slowdown in China also caused by this combination?
- Kenneth Pao Jan 10, 2016
  
  From an over view approach, China's economic slow down is due to multitude of reasons - slow down demand from EU & US of Chinese exports, delay resolving issues due to complicated transition from export-led growth to a domestic-demand-driven economy in China, wasted time and resources from mis-allocated resources due to centralized planning, and over leveraged provincial and municipal governments and property developers pushing excess commercial and residential properties. Ineffective government communications with domestic and foreign investors and financial media is not helping either.
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Iain Henderson Jan 6, 2016

If debt or even government debt was a solution to the current malaise then why, with record amounts of debt every where are we in such a malaise? I suggest the answer is Asset inflation has reduced returns such that corporations and investors don't see a future that encourages investment. no investment means lower future revenues requiring more cost cutting to maintain gross profits. Gross profits that would have been once distributed as wages in the form of bread winner jobs. Any government intervention is nothing more than a band aid fix with long tern downside, of debt repayments from lower incomes. Just as we experience now.

There is no free lunch, economists have spent the last 30 years trying to convince us that a free lunch is possible.

Historically this has never worked, can you imagine a government actually investing in projects that make a positive financial return? The economy is no less a live environment that the actual environment. Short term boosts are that short term and result in unexpected outcomes.

We once increased standards of living via improvements in purchasing power, increases in productivity and technological advances that mas production made affordable. Today deflation is a dirty word, and currency devaluation is seen as a solution, while only positively a small portion of the economy.

Economists could take a leaf from medical Doctors, whose first rule is to do no further harm to the patient.
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jack murphy Jan 5, 2016

In 2012 on the Charlie Rose show Joe lamented that ACA was a dog - an inefficient mess - or words to that effect. Charlie was stunned but Joe still thought Romney was worse.

But along comes Netflix and exposes ACA in simple layman terms. Apparently Obama like everyone else in congress understood what had to be done. Fix the food supply and if you did that the savings would be enormous and trillions of money tied up in healthcare could be freed to economic growth. So what did Obama do? He sent his wife over to deal with the food industry. What happened? The lobbyists ate her alive. All documented in the movie "FED UP" on Netflix. And Obama's reaction - not a peep. Just forgot about it and went back to his golf game. Moral of the story - Presidents matter.
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Q Eternity Jan 5, 2016

While I like Joe, I feel David Stockman has a far better feel of 'what went wrong'. And the biggest mistake had been 'pulling demand forward' starting with 'easy Al' at the Fed and ever since.
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Martin Kilgariff Jan 5, 2016

"The only cure for the world’s malaise is an increase in aggregate demand. Far-reaching redistribution of income would help, as would deep reform of our financial system not just to prevent it from imposing harm on the rest of us, but also to get banks and other financial institutions to do what they are supposed to do: match long-term savings to long-term investment needs." .....

I didn't think that a bank ability to loan money was restricted by savings. ....

The Bank Of England - "Money creation in the modern economy" - outlines how banks create money - .... http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q102.pdf

A nice overview is also given here: ....

http://positivemoney.org/how-money-works/banking-101-video-course/how-is-money-really-made-by-banks-banking-101-part-3/
....
I'm a little confused - If money creation (through loans) is not dependant on a banks deposits (i.e. savings), then why would financial institutions need to: ... match long-term savings to long-term investment needs: ?
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Martin Kilgariff Jan 5, 2016

"The only cure for the world’s malaise is an increase in aggregate demand. Far-reaching redistribution of income would help, as would deep reform of our financial system not just to prevent it from imposing harm on the rest of us, but also to get banks and other financial institutions to do what they are supposed to do: match long-term savings to long-term investment needs."

I didn't think that a bank ability to loan money was restricted by savings.
The Bank Of England - "Money creation in the modern economy" - outlines how banks create money - http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q102.pdf

A nice overview is also given here
http://positivemoney.org/how-money-works/banking-101-video-course/how-is-money-really-made-by-banks-banking-101-part-3/

I'm a little confused?
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yw yap Jan 5, 2016

hmmm.... is EF Schumacher's Small Is Beautiful a bad idea?
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G. A. Pakela Jan 4, 2016

After the financial crisis of 2008, the U.S. embarked on the highest level of deficit spending since World War II, most of which was fully accommodated by the Federal Reserve through purchases of Treasury debt. This was the most stimulative fiscal and monetary policy over the entire post-war period. And yet in spite of deficits that peaked at about 10% of GDP, economic growth was only about 2%. It would appear that the multiplier was about 0.20. A balanced budget multiplier would presumably be far less. The Japanese have spent two decades enhancing their infrastructure with very little to show for it. If the infrastructure investments are so critical, why don't the states issue bonds and raise taxes themselves? States are far more capable of understanding their infrastructure needs than federal agencies.
- Kenneth Pao Jan 10, 2016
  
  The FED's QE actions pushed trillions into the banking industry which loaned them out at ultra low interest rates to large corporate clients which used them to buy back stocks to keep their stock prices up due to lack of good investment opportunities. The net effect of the QE actions is that they did little for the main street economy but kept Wall Street going. Somehow between the federal/state governments and the FED, they should have targeted the QE actions to release funds for large infrastructure improvement projects to inject funds into the main street economy as well as improving the nation's infrastructure needing upgrade.
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- Avraam Dectis Jan 6, 2016
  
  .
  And QE effectively monetized a few trillion in debt with no inflation, so the deficit spending was better than free.
  
  Seems to me that worked out well if you look at the big picture.
  
  What is the calculation for the .2 multiplier?
  .
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Vladimir Rogozhin Jan 4, 2016

The economy of of the existential chaos: the fall into the future continues. Mankind needs new ideas, new course.
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dan baur Jan 4, 2016

Good thing no one listens to Stiglitz. Time to retire, dude.
- henry bonk Jan 12, 2016
  
  Totally agree. His proposals are simplistic and the same dishes he has
  been serving for the last 25 years.
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- Michael Public Jan 5, 2016
  
  Actually - he talks and people listen. Dan Baur, on the other hand...
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William Sheridan Jan 4, 2016

If the Great Malaise continues, what do you make of the report NO ORDINARY DISRUPTION from the McKinsey Global Institute that proposes the world economy is already in a situation of growth, AND it is this growth that poses the greatest risk of continuing disruption in the foreseeable future? What they claim is that most of the usual indicators of economic activity are taken from the developed countries, BUt it is the developing countries where the most growth is occurring, AND will continue to occur also in the foreseeable future! I'm just asking - a clarification would be useful.
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Procyon Mukherjee Jan 4, 2016

Stiglitz is again spot on; the time has come to look into demand side of the problem that we ignored to our own peril. Supply side has generated so much that demand shaping got into troubled waters and as Stiglitz puts it brilliantly, "as money moves up demand goes down".

The ultra loss monetary cycle rail-roaded this to happen in front of our eyes and the delusion was widespread; so much of liquidity did so little to consumption.

The solution is reforms in developing economies, which the polity is embroiled to disallow. The shutters of finance, that stops fund to flow to long term infrastructure making, better be pulled.
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Marc Laventurier Jan 4, 2016

More like 'The Great Mayonnaise'. I like Uncle Joe, but these remarks about "insufficient global aggregate demand" conjure up the image of the professor as Henry VIII at table, waving a roast leg of De Long around while plotting the inevitable debasement of the currency required to lubricate the rest of their theology.
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Avraam Dectis Jan 3, 2016

.
No point in throwing your hands in the air and giving up.

What is the solution to the lack of a solution?

The long term solution is more economists running for national office in both parties. There are very few people in Congress with decent financial backgrounds. If we could get a decent economist in every district to run for each major party nomination, every year, eventually enough would win to have an effect.

The short term solution is to get Central Bank financing of infrastructure investment passed. The concept is becoming more popular and it is getting backing from some very credible economists. Such an approach avoids deficit hysteria and is unlikely to be inflationary in relatively moribund economies.

So quit your moaning and do something.
.
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Steve Hurst Jan 3, 2016

'It makes sense for countries like the US and Germany that can borrow at negative real long-term interest rates to borrow to make the investments that are needed'

Expecting Germany and the US alone to save the World is optomistic. The funds they could invest cannot be expected to raise the Worlds 'malaise' if there is indeed a malaise. Asset stripping the environment has been the engine of growth and the true cost bill deferred. It cannot be deferred indefinitely, sooner or later tomorrow becomes today

If the blockage to remedy is political then the remedy is politcal not economic. As nations are becoming more nationalistic and partisan politics will become more not less strident. In fact they have to get more strident for change to occur; politics is a cause and effect system
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lakshma reddy Jan 3, 2016

I can understanding the difficulty of many economists with Keynsean distorted version of economics as a science in undertanding the driving forces of global political economy as it exists now in a divided national political world and their abhorrence for basic principles underlined by Adam smith and marx.

This also points the forgetfulness of effects of national political decision making on global aggregate demand as well as oblivion of global industrial consumption in the total global demand and consumption and employments and income distributions.

It again shows why economists are mis diagnoising and unable to to pinpoint the correct policy prescriptions both short term and long term in terms of the diagnosis of deficiency of global aggregate demand.

It also indicate the lack of understanding of convergence and divergence of driving forces of politics and economics and which Marx also has failed.

While Stiglitz has rightly came to conclusion that obstacle to global economy is not with economics and lie with politics and ideaology but he stopped short to recommend the re medial right politics and ideaology to stimulate global economy and growth with conserving the environment and climatic changes?

I may not be competent to challenge the authority of great economists but my endeavor only as a common man with global citizenry standing.
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Steve Bull Jan 3, 2016

Perpetual growth in demand on a finite planet...what could possibly go wrong?
http://olduvai.ca
- Marius Van Andel Jan 6, 2016
  
  Exactly, consumption, investments are never "green"
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Jeremiah Hartnett Jan 3, 2016

Your thought process is dangerous.
- Wim Nusselder Jan 3, 2016
  
  @JH Why? For whom?
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Wim Nusselder Jan 3, 2016

Aggregate demand increase being the only cure for the world's malaise assumes a model of the (economic) world (the way in which we organize that people get what they need and want) that only includes markets (supply and demand matching) and governments intervening in markets. If aggregate demand does not match aggregate need, government expenditure investment/consumption) can indeed help. As can government production (essentially coordination services and overcoming prisoners' dilemmas) if aggregate supply does not match aggregate need.
However, if we distinguish more ways of organizing our economy than by matching demand and supply, more cures become thinkable and available. The first of them requires recognizing that social hierarchies, of which governments are not the only example, need not be seen as ways to match demand, supply and need, but are more appropriately seen as ways to articulate wants and need (on the basis of interests and ideals) and to collectively gather the resources needed to meet them.
In addition to markets (matching demand and supply on the basis of dependence) and social hierarchies (prioritizing interests and ideals on the basis of power) one can distinguish at least one or two additional ways of organizing our economy.
See http://www.liberalforum.eu/en/publications.html?file=tl_files%2Fuserdata%2Fdownloads%2Fpublications%2F2012%2FGoverningGovernance.pdf for a model with 3 options and http://www.antenna.nl/wim.nusselder/schrijfsels/economics.htm for a model with 4 options.
- Wim Nusselder Jan 11, 2016
  
  @ David Olsen
  I hope you see this response, as responses don't seem to be forwarded by e-mail (and I can't find an e-mail address for you on internet). Do not hesitate to e-mail me (wim.nusselder@antenna.nl) for more explanation.
  Thanks for alerting me to my too dense writing style.
  
  "Reorganizing how people get what they want to increase their contentment" means "changing the economy for the better" (because of the way in which I defined "economics" at the beginning. The key is (changing) "involuntary patterns of behaviour" because (as I wrote) "Most of what we do is
  involuntary".
  Example: If consumer household income increases, spending increases mostly involuntarily (as described by the Keynesian consumption function). It does so for instance because we have a habit of checking date of the month and bank balance when deciding whether or not to give in to a temptation presented to us by some commercial advertisement. If the bank balance happens to by higher because we had more income for that month, we will give in to more spending temptations on the basis of that habit, without any difference in prior 'wants' and any premeditated conscious choice about how to spend the extra income when we first learned that it would increase.
  
  "The tactical way to present these wants (that are less than optimally satisfied) as new wants" refers back to what I wrote in paragraph 5. In the example of consumer income expenditure I just gave, I assumed it to be organized (only) as tertiary economy: by dependence on enterpreneurs defining for us what we need and want (and communicating that for instance with advertisements). The next step (i.e. an improvement) would be to reduce that dependence by follwing a next (quaternary) type of economic leader who tells us for instance to select only fairtrade and sustainably produced things when spending our income. A step back would be for the government (secondary, political leadership) to enforce higher or lower savings than we would habitually 'choose' when our income changes. (But note: the government can also take a quaternary, ideological leadership role by convincing us to spend more on fairtrade and sustainably produced products rather than enforcing such behaviour.)
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- David Olsen Jan 4, 2016
  
  I read a bit of your paper/blog and couldn't make much sense of it. I could not find what 'The key to reorganizing how people get what they want in order to increase their contentment is involuntary patterns of behaviour" and 'the tactical way is to present these wants as new wants' actually entailed.
  
  Try a couple of easily understood examples to illustrate your theory please.
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BT Hathaway Jan 3, 2016

Particularly in the US, would a rise in government spending lead to a proper internal return on the investment or would the dollars leak away as we import other's economic weakness? In a world as deeply connected as ours, we do have to wonder where our deficit spending will go. If it leads to job creation in other countries, then what indeed have we accomplished?

From what I can see, the aggregate demand problem is bigger than what government spending can resolve. The issue is most clearly demonstrated in the population collapse in Japan, but all of the leading economies must digest a decline in internal demand as the post WWII baby boom transitions out of the workforce and downsizes consumption to try and stretch quite meager retirement resources.

70 and 80 year olds do not need more super highways or airports, neither do they need larger homes or new office buildings within which to work. Without enormous immigration, and/or new baby booms (neither of which seems desired in the modern west), how can we not have a multi decadal economic malaise? The real trouble has to do with the long held assumption that economies always grow and can always shrink the relative size of any debt. But from what I can tell, this form of economic thinking fails to consider the impact of a widespread and simultaneous demographically led decline in demand.

What then when the rentiers begin to realize the debts cannot be offset? Will they accept their fate or will they attempt to override sovreignties so as to force the growth of populations and therefore demand, so as to ensure repayment 10 or 30 years down the road?
- David Olsen Jan 4, 2016
  
  You could contrast the decline after the end of the Napoleonic wars with the upturn after WWII. The difference is probably the Marshall plan and the use of Keynesian theory.
  
  In Japan there doesn't seem to have been an attempt at stimulus without a deflationary add on like an increase in the consumption tax. They just don't seem to be able to try something without 'balancing' it.
  Likewise in the Eurozone any fiscal stimulus is limited by the Growth and Stability pact requirements not to exceed a 3% deficit.
  
  Stimulus was tried on a limited basis in the US in the early stages before being pulled back by the republicans.
  
  The point is that there was a lot of talk about fiscal stimulus but actually not much of it done. Central banks and monetary stimulus has had to do all the heavy lifting and has not been as effective.
  
  Retrofitting homes to be energy efficient, changing the way energy is made and distributed, making new energy efficient methods of transport available to an increased number of people - these steps are required if we are not to expire in our own fumes, heat and waste. Govt spending or funding is the obvious way we have currently to achieve these goals.
  
  At some point there will be a generational tipping point where younger people say we want our tax dollars to go towards these objectives and older baby-boomers realise (after the event) that it is actually not going to cost them tax dollars they feared it would.
  
  Govt spending on worthwhile productive ends generates private company sales and is good for everyone.
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- Wim Nusselder Jan 3, 2016
  
  @BTH In a globalized world investment by even the government of the largest economies may indeed be insufficient. Stiglitz' reasoning is derived from a one country model so would require global government investment (e.g. through the UN) to hold in reality.
  Global demographic decline can be offset by average growth and by decreasing global inequality.
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Rob Maris Jan 3, 2016

"That means overcoming deficit fetishism."
And following the article, it shows that Stiglitz focuses on more government spending, instead of focusing on redistribution of wealth, especially financial wealth. Debt financed government spending leads (in the end) to more inequality: Debt mechanically always matches equal financial assets (as a whole).
Also, debt in general is still perceived as too high, resulting in balance sheet recession phenomena and forced austerity measures.

To conclude: Stiglitz had to discuss two alternative ways out of the malaise: more debt based spending or dramatic increase of tax progression (income & wealth tax) comparable to post WW2 taxation rates in the U.S. and Europe.
However, the latter is prone to capital flight effects, but it's worth to cooperate worldwide on this, because continuing debt based spending is not sustainable.
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Michael Public Jan 3, 2016

All this true. But there is an obstacle to progress. Big business has captured society, including the government and the press. There is no ways they will let go in the interest of a greater good for all. They are quite content with the malaise, the inequality and the lack of demand - so long as they control most of it.
- Richard Solomon Jan 3, 2016
  
  I agree with M Public. As long as multinational corporations and big banks direct the policies of governments in the major economies of the West there is no way that 'active governmental policies' will be allowed to take hold. Infrastructure investments, more progressive and higher taxes, etc will never be approved in the US Congress for example even if Hillary Clinton becomes the next President. Things will have to get s lot worse for these kinds of policies to have a chance to be implemented.
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- M M Jan 3, 2016
  
  +1. MP, I and many commentators on PS have been saying exactly this for quite sometime. 2016 is likely to be a very difficult year.
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