“We must not let a good crisis spoil”

Joseph stiglitz

David Aurel | CNBC

US economist Joseph Stiglitz believes the time has come to realign the US economy, saying “we must not let the crisis go to waste.”

The former senior vice president and chief economist of the World Bank said on Thursday that the coronavirus pandemic had highlighted the dysfunction of the economic system, citing inequality, the climate crisis and the lack of resilience of the economy of Marlet.

Stiglitz said he was optimistic that many of the current problems can be solved at the same time because they are interrelated.

“You can get one for two,” he told CNBC’s Steve Sedgwick at the annual Ambrosetti Forum on the shores of Lake Como in Italy.

For example, the United States should invest in building “green” infrastructure that creates jobs and helps reduce inequalities, Stieglitz said. “Once you think about it, you realize we can tackle two or three of these issues at once,” the 78-year-old said, adding that America has the manpower and the capital. .

Stiglitz said it would be “healthy” for the US economy to raise taxes “a little” to fund “some of the things we need for the common good.”

In July, 130 countries supported a global minimum corporate tax rate of 15%, and Stiglitz said the move ended the race to the bottom on taxes, showing how the United States envisioned a rate of 25%. %. Used to be.

Stiglitz said a successful economy is defined not only by tax rates, but also by other factors such as infrastructure and research and development efforts.

He said there is a growing consensus that the United States must replace outdated laws that have been in place for 125 years and tackle excessive market power across the United States. “The concentration of market power has increased dramatically over the past 35 years,” he said.

Over-regulation and over-taxation, Stiglitz says, will not lose the West’s competitive edge against emerging powers and China. “I am really convinced that this new program will really strengthen us,” he said.

Stiglitz said that competition makes market economies more innovative, while monopolies reduce innovation. “We’ve seen how the big giants really crush innovation,” he said.

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