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Joseph Stiglitz recently dismissed the relevance of secular stagnation to the American economy, and in the process attacked (without naming me) my work in the administrations of Presidents Bill Clinton and Barack Obama.The theory of secular stagnation, as advanced by Alvin Hansen and echoed by me, holds that, left to its own devices, the private economy may not find its way back to full employment, which makes public policy essential. I think this is what Stiglitz believes, so I don't understand his attacks.Stiglitz condemns the Obama administration's failure to implement a larger fiscal stimulus policy and suggests that this reflects a failure of economic understanding.While I wish the political climate had been different, I think Obama made the right choices in approaching fiscal stimulus.What about the Clinton administration record on financial regulation? With hindsight, it clearly would have been better if we had foreseen the need for legislation like the 2010 Dodd-Frank reforms and had a way to enact it with a Republican-controlled Congress.
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