STIGLITZ: "We have postponed doing anything about the fundamental problems we confront"

[kpete]

There is still much to learn from Lehman
Joseph Stiglitz
FT.com (Financial Times’ website)
September 18, 2013

As we mark the fifth anniversary of Lehman Brothers’ demise and the onset of the global financial crisis, we must ask: what have we learnt? How well have we done? To what extent are the persistent weaknesses in the US and Europe a result of the misdeeds of the financial sector before the crisis, the crisis itself, and the way in which the crisis was managed?

The best – and it’s a great deal – that can be said is that we avoided the worst: another Great Depression. Whether this was a result of the forceful action of governments and central bankers is an exercise in counterfactual history – what would have happened without the massive bailouts we’ll never know for sure.

What we do know is a half decade after the crisis, gross domestic product in many European countries is lower than it was before the crisis, a worse performance than in the Great Depression; that some countries – like Spain and Greece – are in depression; that labour force participation in the US is at a 35 year low; that the income and wealth of most Americans is still markedly lower than it was before the Great Recession; that the banking industry is more concentrated, the financial sector less competitive, that new abuses get uncovered almost every day, that not a single senior banking official has been held accountable, and that the financial sector has succeeded in fighting off many of the reforms that would make it more competitive, more transparent, less risky, and less prone to take advantage of ordinary citizens. We know too that the increase in debts and deficits that resulted from the downturns is now constraining actions in both Europe and the US that would enhance growth and employment...
...

…Had the government demanded more of the banks, our fiscal position would have been better; had we demanded as a condition for getting our money that the banks lend more – rather than paying out bonuses – maybe we would have had a more robust recovery. Even Hank Paulson, former US treasury security, was surprised, and offended, at the banks’ behavior…
…

… Misguided ideas shaped the economic agenda in the years before the crisis. Ideas about limited government led, ironically, to the largest government interventions in the history of mankind. But the same ideology and ideas that prevailed before the crisis have held enormous sway in the years after the crisis: not surprising, since large inequalities of economic power lead to large inequalities in political power. The result is a world which is in some ways safer, in other ways riskier – but a world in which we have postponed doing anything about the fundamental problems we confront.

MORE:
http://www.dailykos.com/story/2013/09/18/1239783/-Pt-I-Stiglitz-we-have-postponed-doing-anything-about-the-fundamental-problems-we-confront

[blkmusclmachine]

1. .

.

[Octafish]

2. But but but but but but but but...

...and We the People are PRIVILEGED to bail their Bankster butts out again and again and again and again and again and again and again and again and again and again and again and again and again and again and again and again and again and again and again and again and again and again and again and again and again and again and again and again and again and again and again and again and again and again and again and again and again and again and again and again and again and again and again and again and again and again and again and again and again and again and again and again and again and again and again and again and again and again and again and again and again as things stand now.

Thanks for the heads-up, kpete.



What's Stiglitz know, anyway?

[leftstreet]

3. DURec

[OccupyManny]

4. Bush

It may not help the economy but it would lift spirits if Bush and his banking cronies that caused this were arrested and tried.

[KoKo]

5. K&R!