Beyond the Bubble Economy

yesmagazine.org — As Nobel Economist Joseph Stiglitz correctly observes: “When private rewards are well aligned with social objectives things work well; when they are not, matters can get ugly.” As the 2008 crash revealed, Wall Street’s reward system renders it incapable of self-regulation in the public interest. Furthermore, Wall Street financial institutions have become so over leveraged and so interconnected that the collapse of one threatens the collapse of all — and thereby potential total collapse of the global economy. Corrective action necessarily falls to government, which can deal with Wall Street’s failure to self-regulate in one of four ways.

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