I have just caught up with the article written by Joe Stiglitz on the Australian economy, American Delusions Down Under. I have had serious doubts whether he understands his own economy given his Keynesian orientation, but that he has no idea about Australia is manifest.

What matters more for long-term growth are investments in the future – including crucial public investments in education, technology, and infrastructure. Such investments ensure that all citizens, no matter how poor their parents, can live up to their potential. . . .

To be sure, given its abundance of natural resources, Australia should have far greater equality than it does. After all, a country’s natural resources should belong to all of its people, and the “rents” that they generate provide a source of revenue that could be used to reduce inequality. And taxing natural-resource rents at high rates does not cause the adverse consequences that follow from taxing savings or work (reserves of iron ore and natural gas cannot move to another country to avoid taxation). But Australia’s Gini coefficient, a standard measure of inequality, is one-third higher than that of Norway, a resource-rich country that has done a particularly good job of managing its wealth for the benefit of all citizens.

Well I see fit to comment on the American economy although I live here, so he is welcome to comment on ours even though he is out of his depth on everything he says. But it is a wonder that he doesn’t stop to think about his own empty rhetoric when we find in between the above two paras these two paras:

There is something deeply ironic about Abbott’s reverence for the American model in defending many of his government’s proposed “reforms.” After all, America’s economic model has not been working for most Americans. Median income in the US is lower today than it was a quarter-century ago – not because productivity has been stagnating, but because wages have.

The Australian model has performed far better. Indeed, Australia is one of the few commodity-based economies that has not suffered from the natural-resource curse. Prosperity has been relatively widely shared. Median household income has grown at an average annual rate above 3% in the last decades – almost twice the OECD average.

Most of that growth he discusses was under a Coalition government that made it a matter of policy to balance the budget and contain its spending. That is the Australian model from which the US, and Joe Stiglitz, might learn something he is apparently clueless about.