Wall Street’s Toxic Message
Joseph Stiglitz

The contrast between the handling of the East Asia crisis and the American crisis is stark and has not gone unnoticed. To pull America out of the hole, we are now witnessing massive increases in spending and massive deficits, even as interest rates have been brought down to zero. Banks are being bailed out right and left. Some of the same officials in Washington who dealt with the East Asia crisis are now managing the response to the American crisis. Why, people in the Third World ask, is the United States administering different medicine to itself?

When the Third World suffers economic collapse, we tell them to swallow the pill, fight through the pain, and the reward will be a healthier, more efficient economy. We tell them to reduce spending and let foreign capital (Wall St) show you the light at the end of the tunnel. The U.S. can’t seem to take its own advice. As a nation we really haven’t sacrificed too much since WWII, choosing entitlements over fiscal responsibility. It would be nice to practice what we preach.