Tuesday, October 5, 2004

by Andrew Quinton
Gazette Reporter

The 2001 winner of the Nobel Prize in Economics, Joseph Stiglitz, spoke
on “Economics and the Election” last night in front of an overflow
crowd in SCI 101. The talk consisted of an overview of the last four
years in American economics, focusing on the problems that have arisen
during the recent economic recovery, followed by possible explanations
for their occurrence. Stiglitz closed by synthesizing the problems and
their causes into a list of economic principles that he described as
“the material that will be in future economics textbooks.”

Swarthmore economics professor Bernard Saffran introduced Stiglitz by
reading a passage out of one Stiglitz’s books and briefly summarizing
Stiglitz’s impressive list of past positions held. He was Chairman of
the Council of Economic Advisors during the Clinton administration,
served as Chief Economist and Senior Vice-President at the World Bank,
and is currently a professor of economics and finance at Columbia
University.

The talk began with an explanation of three problems facing our economy
today: the gap between actual and potential GDP, the “quadruple
deficits” of jobs, trade, fiscal, and households, and issues relating
to energy and health care policy. Stiglitz noted that while our economy
has improved, it has not done so at the rate one would expect coming
out of a recession and that in fact growth has lagged behind the recent
gains in productivity, creating a $1.7 trillion gap between actual GDP
and potential GDP, the GDP we would have if we were using our
technology and labor force correctly. The lack of growth is a strong
rebuttal of President Bush’s economic policies and tax cuts.

Although Stiglitz largely stuck to verifiable facts, it was clear that
he is disenchanted with the Bush economic plan. He expressed worry that
America’s recent budget deficits have been caused by undisciplined
government spending (and tax cuts) and will have repercussions for
future generations. The argument for the creation of deficits is that
they stimulate the economy, but such stimulation has not occurred.
Along with finding fault in our recent economic policy (or lack
thereof), Stiglitz offered suggestions for the future such as
increasing unemployment insurance and making the production of
greenhouse gases a taxable action. This would create a focus on
conservation and would also reduce demand for oil.

In closing, Stiglitz listed off some lessons that can be learned from
the failures of the past four years. They included the ideas that lower
interest rates may lead to increased consumption rather than
investment, bubbles such as the 1990s internet bubble can have strong
adverse affects over the long term, certain things such as energy and
health care cannot simply be left to the market, and that the
government must try to combat market-produced inequalities. A lengthy
question and answer period followed the talk and was highlighted by a
shattering of the “myth of an impartial central bank,” showing how Alan
Greenspan’s positions over the years have been politically motivated
and demonstrate a commitment to a government-reduction agenda.

*****

* Militants calling themselves Salafi Abu Bakr al-Siddiq claimed
responsibility for recent killings of two hostages, one Iraqi and one
Turk. The television network Al-Jazeera broadcast a video from the
militants on Monday that showed two men kneeling with four men behind
them. On the video the militants claimed that the Turk was killed
because he was an agent for Turkish and Iranian intelligence, and
Al-Jazeera reported that the militants stated the Iraqi was killed for
attempting to arrange a sale of materials used to develop explosives to
a foreign group. The identity of the man identified as a Turk was
unknown as of late yesterday, while the family of the Iraqi identified
him as Ayad Anwar Wali, a 43-year-old businessman kidnapped in August.
The family denied that Wali was involved with any activity of the kind
of which he was accused, and records show that he had lived in Italy
since 1980 and was in Iraq attempting to develop business for his
furniture company. In addition, the rash of recent violence in 
Iraq continued on Monday, as two bombs exploded in central Baghdad
killing 21 and wounding 85. The target of the first bomb was a
recruiting station for the Iraqi national guard, while the second
targeted a Western convoy. Other bombs killed and wounded residents of
Baquba and Mosul. Also on Monday, Poland announced discussions of troop
pullouts beginning next year, but said that definite plans would not be
made until after the Iraqi elections scheduled for January.

* In what Israeli military sources called an undercover action to
arrest wanted Palestinians, Israeli Special Forces followed three
members of Yasser Arafat’s personal guard to the supermarket and began
firing on them as they shopped, according to Palestinian sources. The
operation in the town of Ramallah in the West Bank left the three
Palestinians and one Israeli soldier dead. A number of other Israeli
operations on Monday and early Tuesday left nine Palestinians dead in
Gaza, including at least two civilians.

* President Bush held a signing ceremony for the fourth tax cut package
in the four years of his administration on Monday at a YMCA in Des
Moines, Iowa. The new law extends a number of provisions from the
earlier packages, including an expansion of the child tax credit, an
increase in the size of the 10 percent tax bracket, and relief from
what is colloquially known as the marriage penalty. In addition, the
bill extends 23 tax breaks for businesses. Taken together, the cost of
the new tax cut extensions is estimated to be $131 billion dollars over
the next decade. The same day while campaigning in New Hampshire, John
Kerry struck back at Bush for comments made by the President and
surrogates following last Thursday’s debate about Kerry’s remark that a
president’s decision to wage preemptive war should pass a “global test”
of legitimacy. Said Kerry, “[t]hey’re misleading Americans about what I
said…And if they were honest enough to give America the full quote,
which America heard, they would know that I’m never going to allow
America’s security to be outsourced. That’s the job of the president.”
He continued saying that he will be a president who understands “that
America is stronger when we are leading global alliances and when we
are leading the world, and that’s how we are going to do it. And that’s
what I meant.”

*****

Study Abroad program visit: Arcadia University, programs in England,
Ireland, and Greece
Sharples Dining Room #5, 12:00 p.m.

Study Abroad program visit: University of Ghana
Essie Mae’s, 12:00 p.m.

Study Abroad program visit: Hamilton College in Spain
Kohlberg 318, 4:15 p.m.

Faculty lecture: Thomas S. Dee, “Are There Civic Returns to Education?”
Scheuer Room, 4:30 p.m.

Career Services: information session with Infosys Technologies Inc.
Bond Hall, 7:00 p.m.

Feminist Film and Media Studies screening: Jeanne Dielman, 2300 Quai du
Commerce, 1080 Bruxelles
LPAC Cinema, 7:00 p.m.

Self-defense class
Kohlberg 115, 7:00 p.m.

Food in Film series: Train Station for Two
Science Center 101, 7:30 p.m.

Cooper Event: Peter Boal and Company perform
Pearson-Hall Theater, 8:00 p.m.

Shaolin Kung Fu class
Upper Tarble, 8:00 p.m.

Screening of Vice Presidential Debate
Kohlberg 116, 9:00 p.m.

Tango class
Upper Tarble, 9:30 p.m.

Student Council meeting
Kohlberg 230, 10:30 p.m.

*****

SPORTS UPDATE

Despite a stellar performance by Reuben Heyman-Kantor ’06, with eight
saves in goal, Swat’s men’s soccer lost a tough battle against Moravian
yesterday, 1-0. This recent loss drops Swarthmore’s record to 6-2-1
overall.

*****

Today:
Golf at Stockton, 1:00 p.m.
Cross Country at Haverford, 5:00 p.m.
Field Hockey hosts Johns Hopkins, 5:00 p.m.
Volleyball hosts Johns Hopkins, 7:00 p.m.

Tomorrow
Women’s Soccer hosts Ursinus, 5:00 p.m.
Men’s Soccer hosts St. Mary’s MD, 7:00 p.m.

*****

QUOTE OF THE DAY

“The bravest are surely those who have the clearest vision of what is
before them, glory and danger alike, and yet notwithstanding, go out to
meet it.”
-Thucydides

*****

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