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Stiglitz' New Book "Freefall" Available Now

After two years of freefall, America's economy is finally beginning to stabilize. Many experts say that it was impossible to predict, and that all the appropriate steps are being taken to right this ship. But in FREEFALL: America, Free Markets, and the Sinking of the World Economy, Joseph E. Stiglitz, explains why such contentions are wrong. He was among several which saw it coming. Stiglitz argues that years of neglect-both benign and otherwise-led to our economy's downfall, and that tougher measures must be taken to ensure this does not happen again.

Winner of the Nobel Prize and author of the bestselling books Globalization and Its Discontents and The Three Trillion Dollar War, Stiglitz uses his new book to peel back the many layers of what caused the recession, and enumerate the steps required to resurrect the global economy.
Among the many newsworthy topics Stiglitz covers in the book:

• The makings of a crisis: Stiglitz explains the key factors leading to the crisis, both the inevitable and the avoidable, including the global real estate bubble.
• The flawed response: Stiglitz evaluates what was done in response to the crisis by both the Bush and Obama administrations, and why efforts (including the stimulus plan) were not successful in bringing the economy back online.
• The mortgage scam: Millions of individuals took on mortgages that crippled them financially when the housing bubble burst. Stiglitz explains the warning signs that were ignored, what can be done to resuscitate the housing market, and who is to blame for what he calls "the great scam of the early twenty first century."
• The costs of the crisis: The crisis of 2008 has been very costly-millions of Americans have lost their homes, millions more are seeing hardship as the unemployment rate has soared, older Americans face an uncertain future, with declines in their retirement accounts and house values, and the government has never been in a worse position, with the debt soaring both because of unbridled bailouts and weakening tax revenues.
• The opportunity for deep, systemic change: Stiglitz argues compellingly that there were alternative policies that would have led to a speedier and more robust recovery and that would have left the country less in debt. The bailouts were conducted without a vision of what kind of an economy, and what kind of a financial system were needed as we emerge from the crisis. To too large extent, the focus was on saving the day, with many in the financial sector hoping to go back to the world as it was before the crisis-a world in which they prospered, even if others did not. The result is that the financial system that is emerging may be even more vulnerable to another crisis. He explains how politics (special interests) and flawed economics (ideologies that served those interests) led both to the crisis and the inadequacies in the response. Policymakers need to escape decades of over-reliance on free marketers and their misunderstanding of the economy and restore the balance between markets and government.

With expectations that the worst of the recession may now lie behind us, Stiglitz focuses the end of FREEFALL on the aftermath of the crisis. He explains the profound effects it will have on the global economic order-including the balance of economic power-that will emerge. In parsing out blame, he does not shy away from pointing the finger at his own profession, and argues that not only has the economy been in freefall, but so too have been long cherished ideas. He also focuses on the "new economic order" which could or should emerge, one which would at last deal with several of the country's major long term problems. He explains how a well designed recovery program could be a first step in a restructuring the economy. These steps include not only a reallocation of our financial resources, but also a re-evaluation of our sense of moral responsibility. Stiglitz emphasizes the need for collective action and restoring a balance between the role of the state and the market; such a rebalancing is necessary not only to avoid the kind of monumental financial mistakes that have inflicted such costs on our society, but also to promote growth that is more consonant with our fundamental values. Increasing GDP, for instance, will do little good, if our planet is put in jeopardy.

After escaping what Stiglitz calls a "near death experience," America is in a unique position: we have the opportunity to fix the mistakes in our financial and economic system and move toward a more equitable and sustainable society. The question is whether we will seize this opportunity.

ABOUT THE AUTHOR:
Joseph E. Stiglitz is University Professor at Columbia University in New York and Chair of Columbia University's Committee on Global Thought. In 2001, he was awarded the Nobel Prize in economics for his analyses of markets with asymmetric information. He was a lead author of the 1995 report on climate change of the IPCC, which shared the 2007 Nobel Peace Prize. Stiglitz served chairman of the Council of Economic Advisers during the Clinton Administration, and as Chief Economist and Senior Vice-President of the World Bank from 1997-2000. In 2008, he was appointed by President Sarkhozy 2009, of an international Commission on the Measurement of Economic Performance and Social Progress. In 2009, he was appointed Chair of the UN Commission of Experts on Reforming the Global Financial and Economic System,

FREEFALL:
America, Free Markets, And the Sinking of the World Economy
By Joseph E. Stiglitz
W.W. Norton & Company
On sale: January 19, 2010
Hardcover / $27.95 / 400 pages
ISBN-10: 0393075966
ISBN-13: 978-0393075960