Monday, January 19, 2009

Back to economic reality with Joseph Stiglitz

As we're trying to salvage more of the financial system than we really should, especially with taxpayers' money, it's worth getting back to understandable economics and to a financial system that is the tool, the slave, not the master of the "real" economy. By the way, isn't the term "real economy" ironically pointing to the fact that the rest of it wasn't that real? The way the economy is being financed needs to be completely reviewed and the responsibility lies with each one of us. This is not about "bad guys" in the financial world who got rich at the expense of the rest of us: almost everybody was happy getting credit beyond reasonable levels, almost everybody voted for the system through their patterns of consumption and investment. We've been living in a world where the poorer economies were in essence financing the richer ones which indulged in levels of consumption that were disproportionate relative to their actual creation of value, especially long term value. Time to listen a bit more to experts like Joseph Stiglitz, who was recently interviewed on French TV. As usual an uncompromising analysis of the situation (voice-over in French covers his voice at times):

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