Roaring Nineties

His previous book revealed the shocking truth about globalization. Now, Joseph Stiglitz blows the whistle on the devastation wrought by the free market mantra in the nineties – and shows how Bush is ignoring the lessons from what happened. 

This is the explosive story of how capitalism US-style got its comeuppance: how excessive deregulation, government pandering to big business and exorbitant CEO salaries all fed the bubble that burst so dramatically amid corporate scandal and anti-globalization protest.

As Chief Economic Advisor to the President at the time, Stiglitz exposes the inside story of what went wrong, but also reveals how Bush’s administration is now making things worse – much worse – for the economy, the US and the rest of the world. Stiglitz takes us one step further, showing how a more balanced approach to the market and government can lead not only to a better economy, but a better society.

‘One of the most important economic and political thinkers of our time’ 
Independent on Sunday

‘Stiglitz’s dissection of the follies of the “Roaring Nineties” is as good as it gets’ 
Will Hutton

‘An iconic figure … Stiglitz’s book will encourage those who wish to halt the partial Americanization that has already taken place in Europe’ 
Daily Telegraph

‘Stiglitz has become a hero to the anti-globalization movement’ 
Economist

‘An acidic economic polemicist … Economics is now a far more powerful agent of change than politics. And that makes [Stiglitz] a very dangerous man’ 
Faisal Islam, Observer

Just a decade ago, I left my quiet life in Stanford as a professor of economics to go to Washington, to serve first as a member, then as chairman of President Clinton's Council of Economic Advisers. I had spent the previous quarter century doing research on economic theory and economic policy. I wanted to see what really goes on—to be a fly on the wall. But I wanted to be more than a fly on the wall. I had entered economics in the sixties, the years of the civil rights and peace movements. I wanted, I suppose, to change the world, but I wasn't sure how; as an academic, I needed to understand the world better first.

Little did I know how much I would learn. By the time I left Washington, having served throughout the first Clinton administration and then three years as senior vice president and chief economist at the World Bank, much had changed. These were the years of the tumultuous, Roaring Nineties—the decade of mega-deals and mega-growth. That much is in the public record. But the idea for this book was hatched as I considered stories that were not so widely available, or so well understood. The recovery from the 1991 recession, for instance, seemed to defy what was universally taught in economics courses around the world. The popular version, trumpeted by some within the Clinton administration, claimed that deficit reduction (reducing the gap between the government's expenditures and its taxes) had brought about the recovery, yet standard theory said that deficit reductions worsened economic downturns. To take another example, I had been involved in many battles over deregulation and accounting and thought that particularly with banking deregulation, we pushed too far. We had also missed opportunities to improve corporate accounting. More generally, the decade marked the emergence of the so-called New Economy, with the rate of productivity increases doubling, or tripling, what it had been for the preceding two decades. The economics of innovation had been one of my fields of specialization as an academic, and it was important, I thought, to get a better grasp of what had caused the enormous slowdown in productivity in the seventies and eighties, a