Joseph Stiglitz, a former Nobel Prize winner in economics, made waves yesterday when he argued against Bernanke’s claim. Stiglitz, in an interview with Daily Finance, said that ” we would be lucky to be out of the recession by 2012…2010 may be a year of positive growth, though far weaker than would be necessary to get unemployment down significantly.”

The current unemployment rate has remained a sticking point for many of the assessments of the economy, including Bernanke own view. The lack of new jobs created provides a frightening scenario for the world’s wealthiest countries, who are in desperate need of tax revenue to pay for the stimulus measures undertaken to right their respective economies.

According to the Organization for Economic Cooperation and Development, “high unemployment in the world’s wealthiest countries could last years,” ensuring that the crater left by last year’s events would be much deeper than most experts had hoped.

Stiglitz’s view makes job creation the number one factor in any recovery, a fact which echoes much of the rhetoric of President Obama around the time of the stimulus bill’s passage. Stiglitz also came out to condemn the practice of trading in complex derivatives by saying they do not serve the “common good” in any meaningful way.

This Nobel Prize winner’s analysis should not be dismissed as naysaying, but rather be looked upon as a challenge for the private sector, which may have the power to infuse the economy with the kind of projects designed to put people to work. Without an improvement in unemployment at some point in the next two quarters, the futures outlook could be grim.

[image via Seattle Municipal Archives]

The Democratic Party of Japan is led by Yukio Hatoyama, who also will likely be named the new Prime Minister of Japan. The Economist notes, Hatoyama “promises a government less beholden to the powerful civil service, wants to temper the free market and is keen to dole out cash to the disadvantaged in the economically stagnant and aging country.”

Having endured the “lost decade” under the leadership of the Liberal Democratic Party (LDP), the people of Japan have embraced the new direction in large numbers. The goals of the new administration will likely be similar to new administration’s in power around the globe, including making loans more accessible and affordable, investing in sustainable energy infrastructure, and stimulating economic growth through spending programs.

[image via photopassjapan]

As BusinessWeek notes, “the money can’t come soon enough for the home appliance industry, which is mired in an unprecedented sales slump that began when the housing market cooled in 2006. Since then that slump has worsened considerably. Shipments of washers, dryers, refrigerators, and ovens dropped 10% in 2008 and are down 15% through July.”

While this program might be following a similar formula to CARS, it’s hard to imagine it having as big an impact. State money to encourage consumers to make the switch has been around for years without much success. These federal funds are merely piggybacking onto those existing vouchers so it’s unclear whether this added money will be enough to really influence shoppers to change, despite the cost-saving benefits.

While I applaud the government for attempting to bolster the economy with the long term health of the environment as an additional plus, the benefits of these programs are only short-lived at best. I understand that the country wants to see progress and this does achieve immediate results, but it seems this money could be better spent in ways that promote job creation in emerging industries that can sustain long term growth.

[image via ingorrr]