Moral Bankruptcy: Why Are We Letting Wall Street Off So Easy?

by Joseph E. Stiglitz

It is said that a near-death experience forces one to reevaluate priorities and values. The global economy has just escaped a near-death experience. The crisis exposed the flaws in the prevailing economic model, but it also exposed flaws in our society. Much has been written about the foolishness of the risks [1] that the financial sector undertook, the devastation that its institutions have brought to the economy, and the fiscal deficits [2]that have resulted. Too little has been written about the underlying moral deficit that has been exposed-a deficit that is larger, and harder to correct.

One of the lessons of this crisis is that there is a need for collective action, that there is a role for government. But there are others. We allowed markets to blindly shape our economy, but in doing so, they also shaped our society. We should take this opportunity to ask: Are we sure that the way that they have been molding us is what we want?