<![CDATA[Joseph Stiglitz, Nobel Prize winner, explains in two sentences how we got where we are economically and why it was easy to fall for the story along the way.
The task of unraveling all that went wrong in our financial system is a difficult one, but in essence the financial system’s latest innovation was to devise fee structures that were often far from transparent and that allowed it to generate enormous profits–private rewards that were not commensurate with social benefits. The imperfections of information (resulting from the non-transparency) led to imperfections in competition, helping to explain why the usual maxim that competition drives profits to zero seemed not to hold.
Remember all the talk about the miraculous new economy? Suckers born every minute.
Without sustained investment in American intellectual capital, we will end up living on the vanquished memories of when this country was great being doled out at the Republican convention this week.
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