Stiglitz: Osborne is “crazy”

Joseph Stiglitz has been interviewed by the New Statesman. He described George Osborne as "crazy" and "out of touch with reality".

Hot on the heels of his interview in yesterday’s Independent where he slammed “fiscal fetishism”, Nobel prize winning economist, Joseph Stiglitz has given an interview to the New Statesman in which he speaks frankly about the Conservative party’s economic policy and describes George Osborne as “crazy” and “out of touch with reality”.

The interview will appear in next week’s magazine but is trailed on The Staggers blog:

Nobel Prize-winning US economist Joseph Stiglitz says that he is “incredulous” at the Conservatives’ plans to cut spending. He describes Tory economic policy as “Hooverite” and dismisses as “crazy” and “fear mongering” the claim that Britain is at risk of defaulting on its debts.

His response to David Cameron and George Osborne’s plans to cut spending: “Incredulous. … We [Keynesians] had a victory for a year and then back come the Hooverites.”

On Conservative claims that Britain is at risk of a Greek-style debt crisis and risks losing its AAA credit rating: “I think it’s fear mongering and I think the notion that the rating agencies, which did such a terrible job over rating all these these products, that we should show deference to their judgement of good economic policy seems outrageous.”

On the suggestion, put about by George Osborne among others, that Britain is at risk of default: “I say you’re crazy – economically you clearly have the capacity to pay. The debt situation has been worse in other countries at other times. This is all scaremongering, perhaps linked to politics. Perhaps rigged to an economic agenda, but it’s out of touch with reality. One of the advantages that you have is that you have your own central bank that can buy some of these bonds to stabilise their price.”

An article in today’s Guardian outlines that, “George Osborne’s lack of experience rattles City” and suggests that Vince Cable could become Chancellor if the Tories win the election:

“One top City figure whispers that some Tories believe Osborne would be the big casualty. In his place? Vince Cable, the Lib Dem Treasury spokesman who trounced Osborne and chancellor Alistair Darling in combative exchanges during the banking crisis.”

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