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Uploaded on Feb 10, 2010
Joseph Stiglitz emphasises that there is a battle of ideas at the heart of the financial crisis. In the 75 years since the Depression, people had forgotten the lessons they should have learnt, and came to believe that markets were always self-correcting. This simply isnt the case all too often, the beloved invisible hand wasnt actually there. The reason that the financial markets failed, Stiglitz says, is because they were designed to encourage bad, short-sighted behaviour. With big incentives to undertake excessive risk, the 2008 economic collapse was an entirely logical result.