This guy is stating what I stated back in the mid-90's when the economy was seen as good. I didn't lose any money off of it. In fact, I made money but then didn't reinvest in things like .dot com or mortgages. Like he is saying they built a system that exploited ignorance. It think it is massively funny because most of the people harmed are people who are 50 year old Republicans who have money and then find 'by magic' of bad investments based on seemingly great investment information lose it.
The absolute truth is the interdependence of life, the entanglement of all and everything in the language of quantum physics. Capitalism is the historic process of PRIVATE PROPERTY RELATIONSHIP OF ALIENATION,EXPLOITATION AND SUFFERING OF HUMANITY in a modality of commodity production with the sole motive of profit . A WORLD MARKET MECHANISM of ARTIFICIAL SCARCITY,, DISTORTION AND DESTRUCTION. The emergent realisation of limits and obsolete nature of Capitalism is on.
There are people here who barely has any experience as economists (if any) and yet say this guy, a nobel prize winner, doesn't know anything about the subject.
i agree with stiglitz's analysis of and some of his proposed solutions to the economic woes we're all in right now. but i don't think that more government role and regulation is needed. how would the government regulate the economy? and who would regulate the regulator?
Go learn more about economics. Those sub-prime mortgages were the most profitable(in the short term) investments the banks could make. The "market" naturally gravitates for what is the most profitable and in this case the market created too much risk.
All you need is regulators to say, hold on a minute, let the markets play but don't let them invest in too much risky products. How do you keep regulators from being corrupted? No political appointees, limited mandates and several of them.
@Renegen1 You can't keep regulators from being corrupted. Markets exists in term to government as well. This is something Stiglitz himself found in government, just so that the problems were larger. Now even though he sees that fact he can't come to the insight that government have a nature too, esthetically he simply just believes, on blind faith, in a sort of idealism of the state and that certain wise men can fix it. It's incomprehensible drivel, he's completely irrational in that sense.
It's the mark of a simple person to only think in terms of absolutes. I'm sure if your only experience of government is the US government, and only the regulatory bodies that make the news, then you'd think regulators always get corrupted. Of course, if you actually went outside your little world, you'd see that's not true. The only person who has blind faith is you. There are many ways to minimize conflict of interests and to set up an independent government agency.
If there are many ways to do so, then why has it never happened?
Stiglitz expertize is in market failures, but sadly his solutions to them require a kind of governing body that doesn't exist and has no relation to the political process. It's idealism and that is what I think is irrational drivel.
Market failures reflect the fact that no man is perfect. The same is true in government.
What you need is more short traders. They found out about Madoff and Enron
There isn't much point to talk when you are indeed going on blind faith, and even worse, fiction. Madoff was not found by "short term traders". Not even close, you pulled that one out of a hat. It was found by a SEC employee and his bosses didn't listen. As for independent regulators, like I said, it's entirely possible. In fact, it's the norm.
Harry Markopolos works as an independent financial fraud investigator, or essentially, someone who makes money finding out if there's something fishy going on. Exactly what short traders do
Oh my, I think the problem here is that your weighing more into my statement than was intended. I'm not saying all regulators are corrupt and take bribes. I'm saying they have an economic incentive to do so, short traders don't
@bobjimjones And that is the essence of the problem. You see, in finance, the more risks you take the greater the rewards. And bankers are paid, their bonus for example, on the expectancy of returns. A major problem that was addressed just before the crisis was that bankers are paid for returns obtained, NOT for risk-adjusted returns obtained. Plus, compensation is immediate while the loans take years before they blow up. Ever heard of the phrase "tails I win, heads you lose?"
@Renegen1 so certain banks are making terrible business decisions that will lead them to insolvency in the near future. what's the problem? they fail and new ones emerge. that's how the market works, the end.
What a bunch of nonsense. Subprimes most profitable? You are telling me that lending to underqualified borrowers who have the highest risks of defaulting on the loans is in the *self-interest* of the banks? Under that logic, we should see have seen a national housing bubble and collapse for every business cycle. So far in American history, there has been only one national bubble: and that's after the low interest rates by the FED, and government forced subprime lending and subsidies.
This comment has received too many negative votesshow
Left-wing neo-Keynsian with no faith in markets. His Nobel Prize winning treatise has never been empirically proven, just like Al Gore's Nobel Peace Prize winning Gore-Bull warming.
30 years after Reagan was elected, Stiglitz is still running around blaming everything he sees wrong with the economy on Reagan. This after he spent 8 years in the Clinton administration where he could have changed everything. During that time, he did nothing.
So as far as my feeble mind understand...financial markets are based upon trust, and all economics is based on a principle of greed of "this person will always do what is best for him". Great. I always disagreed with the latter, so take THAT econ 101.
This guy is stating what I stated back in the mid-90's when the economy was seen as good. I didn't lose any money off of it. In fact, I made money but then didn't reinvest in things like .dot com or mortgages. Like he is saying they built a system that exploited ignorance. It think it is massively funny because most of the people harmed are people who are 50 year old Republicans who have money and then find 'by magic' of bad investments based on seemingly great investment information lose it.
Foreshadow44 5 months ago
This has been flagged as spam show
The absolute truth is the interdependence of life, the entanglement of all and everything in the language of quantum physics. Capitalism is the historic process of PRIVATE PROPERTY RELATIONSHIP OF ALIENATION,EXPLOITATION AND SUFFERING OF HUMANITY in a modality of commodity production with the sole motive of profit . A WORLD MARKET MECHANISM of ARTIFICIAL SCARCITY,, DISTORTION AND DESTRUCTION. The emergent realisation of limits and obsolete nature of Capitalism is on.
arzoyan 6 months ago
There are people here who barely has any experience as economists (if any) and yet say this guy, a nobel prize winner, doesn't know anything about the subject.
MauroRincon 6 months ago
Nice explanation; right on the mark ;crisp concise and to the point.
DurWinning 8 months ago
haha, he works in his nobel prize
guyjohn59 10 months ago
Look up PETER SCHIFF
ecnerwal999 1 year ago
ok,
dvlzq79 1 year ago
do people still believe that capitalism free-market crap?
hoagyandslim 1 year ago
@hoagyandslim, yes some people think free markets work.
Including Thomas Sowell, an African American economist who followed this problem as it developed.
Watch him explain this crisis in much simpler terms in this short video (only 3 min): /watch?v=E1KwkScA540
imre1000 1 year ago
@hoagyandslim Not you socialist
theMuffinMan9999 3 weeks ago
Regulators are financial Luddites
Invirtuo 2 years ago
i agree with stiglitz's analysis of and some of his proposed solutions to the economic woes we're all in right now. but i don't think that more government role and regulation is needed. how would the government regulate the economy? and who would regulate the regulator?
xpressivist 2 years ago
Go learn more about economics. Those sub-prime mortgages were the most profitable(in the short term) investments the banks could make. The "market" naturally gravitates for what is the most profitable and in this case the market created too much risk.
All you need is regulators to say, hold on a minute, let the markets play but don't let them invest in too much risky products. How do you keep regulators from being corrupted? No political appointees, limited mandates and several of them.
Renegen1 2 years ago 7
@Renegen1 You can't keep regulators from being corrupted. Markets exists in term to government as well. This is something Stiglitz himself found in government, just so that the problems were larger. Now even though he sees that fact he can't come to the insight that government have a nature too, esthetically he simply just believes, on blind faith, in a sort of idealism of the state and that certain wise men can fix it. It's incomprehensible drivel, he's completely irrational in that sense.
Visfen 7 months ago
It's the mark of a simple person to only think in terms of absolutes. I'm sure if your only experience of government is the US government, and only the regulatory bodies that make the news, then you'd think regulators always get corrupted. Of course, if you actually went outside your little world, you'd see that's not true. The only person who has blind faith is you. There are many ways to minimize conflict of interests and to set up an independent government agency.
Renegen1 7 months ago
@Renegen1 I live in Sweden, so no.
If there are many ways to do so, then why has it never happened?
Stiglitz expertize is in market failures, but sadly his solutions to them require a kind of governing body that doesn't exist and has no relation to the political process. It's idealism and that is what I think is irrational drivel.
Market failures reflect the fact that no man is perfect. The same is true in government.
What you need is more short traders. They found out about Madoff and Enron
Visfen 7 months ago
There isn't much point to talk when you are indeed going on blind faith, and even worse, fiction. Madoff was not found by "short term traders". Not even close, you pulled that one out of a hat. It was found by a SEC employee and his bosses didn't listen. As for independent regulators, like I said, it's entirely possible. In fact, it's the norm.
Renegen1 7 months ago
@Renegen1 and the SEC didn't do anything about it
Harry Markopolos works as an independent financial fraud investigator, or essentially, someone who makes money finding out if there's something fishy going on. Exactly what short traders do
Oh my, I think the problem here is that your weighing more into my statement than was intended. I'm not saying all regulators are corrupt and take bribes. I'm saying they have an economic incentive to do so, short traders don't
It's institutional economics
Visfen 7 months ago
@Renegen1 why would lending to people who are the least likely of all to pay back their loans be the most profitable for banks? it defies logic.
bobjimjones 6 months ago
@bobjimjones And that is the essence of the problem. You see, in finance, the more risks you take the greater the rewards. And bankers are paid, their bonus for example, on the expectancy of returns. A major problem that was addressed just before the crisis was that bankers are paid for returns obtained, NOT for risk-adjusted returns obtained. Plus, compensation is immediate while the loans take years before they blow up. Ever heard of the phrase "tails I win, heads you lose?"
Renegen1 6 months ago
@Renegen1 so certain banks are making terrible business decisions that will lead them to insolvency in the near future. what's the problem? they fail and new ones emerge. that's how the market works, the end.
bobjimjones 6 months ago
What a bunch of nonsense. Subprimes most profitable? You are telling me that lending to underqualified borrowers who have the highest risks of defaulting on the loans is in the *self-interest* of the banks? Under that logic, we should see have seen a national housing bubble and collapse for every business cycle. So far in American history, there has been only one national bubble: and that's after the low interest rates by the FED, and government forced subprime lending and subsidies.
LogicalFlawDetector 4 months ago
@xpressivist who said goverment is going to regulate economy, he saying regulate banks!
Hellooo20 2 years ago
securitiztion is about transferring risks to dumb @sses.
chaniwie 3 years ago
Where did that Risky Mortgage Culture come from originate from?
The Government's Affordable Housing Ideology and the Community Reinvestment Act.
averageworkinggal 3 years ago
How do you figure?
flanksteak2 2 years ago
This comment has received too many negative votes show
Left-wing neo-Keynsian with no faith in markets. His Nobel Prize winning treatise has never been empirically proven, just like Al Gore's Nobel Peace Prize winning Gore-Bull warming.
30 years after Reagan was elected, Stiglitz is still running around blaming everything he sees wrong with the economy on Reagan. This after he spent 8 years in the Clinton administration where he could have changed everything. During that time, he did nothing.
Left wing academic gasbag.
hillaroo666 3 years ago
Nice going copy + pasting the same message over and over on all Stiglitz videos you can find.
SwedxSimon 3 years ago
Joseph is very brigth economist and a man with great sencse for solidarity with the people at the bottom of World Society!Respect!
zsylvana 3 years ago
Forget the financial journalists hey, and all those news network summaries!
Unoriginalname3 3 years ago
what a brilliant mind!
idiley 3 years ago
Stiglitz has great sensibilites.
MrFrankBullitt 3 years ago
So as far as my feeble mind understand...financial markets are based upon trust, and all economics is based on a principle of greed of "this person will always do what is best for him". Great. I always disagreed with the latter, so take THAT econ 101.
ozdank 3 years ago
This guy's not too bad. "Accounting gimmickry" is not a bad characterization. Outright, planned fraud more fits the case.
stone1home 3 years ago