What counts as news in your nest? It depends on your taste I suppose and what your interests are. The burd is addicted to news and reads and watches avidly and widely to try to keep up with Scottish, UK and world affairs.
But it was news to me that a Nobel prize winning economist supports the SNP’s long held policy of establishing an oil fund. Much derided by others, it has always seemed a pretty common sense policy. And one that has served Norway very well. Interviewed on Newsnicht, Professor Joseph Stiglitz made a powerful and easily understandable case for such a fund.
Gordon Brewer’s question went something like this: ” There’s a footnote at the end of your book that contrasts the way North Sea oil revenues have been treated by the Norwegian and UK governments. The Scottish Government would want to replicate Norway and create an oil fund for future generations. You would reckon that’s basically a sound thing to do?”
And this was Professor Stiglitz’s response:
“Absolutely right. One way of thinking about it is that oil is an asset below the ground and what you do if you take that asset below the ground and you spend it, you’re poor. It’s like spending any other asset, you’re living off your wealth and if you live off your wealth, it’s not sustainable. So the way you ought to think about it is as portfolio management. You’re taking wealth below the ground and moving it as wealth above the ground because it’s a more flexible form of wealth. This is a good time to do that, wealth from below the ground to above the ground, you get a higher return by investing it in a whole variety of areas. So they’re absolutely right.
“And what to me is so upsetting, so striking, even more striking and upsetting if I were a citizen of the UK, is that since you squandered all that wealth, you took all that North Sea oil and you did very well for that period because you were living off your wealth. And you mistook the success of the Thatcher era as a success based on good economic policy, when it was really a success based on living off your wealth and leaving future generations impoverished.”
Gordon Brewer: “So even though the oil is declining, your advice would be better late than never, do it now?”
Professor Stiglitz: “Exactly. All the more imperative that you do it now. Because you should now realise the mistake of the past. You don’t have that asset and you have to make up for lost time.”
Wow. Professor Joseph Stiglitz, the former Senior Vice President and Chief Economist of the World Bank, winner of the John Bates Clark medal – and did I mention that he won the Nobel Prize for economics in 2001? – agrees with the SNP that an oil fund for future generations would be a very good thing. Even now, when the oil is running out.
Sounded like pretty good news to me. Shame none of Scotland’s news or media outlets chose to report it.