New Society:Stiglitz From "Freefall"

The last chapter of "Freefall" wants America to do better with respect to the financial world's disrespect  and dismissal of moral commitment. Stiglitz feels too many people had taken advantage of others and brought devastating results to the majority of our citizens.Materialism has dominated moral commitment and rugged individualism, market fundamentalism have eroded any sense of community.Rampant exploitation of the unwary and increased social divide are the unfortunate results. Too many people,according to Stiglitz, believe pay reflect social contributions and conclude those who receive higher pay must be making the most social contributions.The financial market has altered the way we think and our attitudes toward incentive pay. Within corporations,the pay of the head used to be forty times that of the average worker. Today, that ratio is shattered and executives have lost any sense of fairness.They appropriate as much as they can get with little or no say from the stockholders(Socialist platform wants a 15:1 ratio with a$15/hr. minimum wage).

Stiglitz states that this "moral deficit" might be harder to correct than the current recession. The moral depravity-financial sector's exploitation of the poor and middle class when they found money at the bottom of the income pyramid will challenge our culture's compassion. The sub prime mortgages are just a long litany of abusive practices in a variety of venues(student loans,pay day loans,rent-a-centers,credit/debit cards).This sector also spends millions to stop legislation that hinders these practices(just watch our new House leaders).

Adam Smith believed in the pursuit of self-interest and that process would benefit society.Unfortunately, this perspective didn't lead to societal well-being since the Reagan-Thatcher revolution started the deregulation process. American individualism(Conservative thought), where each citizen is responsible for their own success and failures without government intervention , has led us with little accountability for their actions which are unpatriotic,myopic and unsympathetic to the lower/middle classes.

Measuring GDP,according to Stiglitz,doesn't always give a good picture of what was going on before the housing bubble burst. Bubble prices(profits) inflated the value of investments in real estate. The crises showed how badly distorted market prices can be.Average GDP went up while the vast majority of the citizens were on a decline. This happens when societies become more unequal. A larger pie doesn't mean that everyone gets a larger slice.The object of societal production is an increase in the well-being of the members of society. Originally,corporate charters(licenses to exist) were granted for a limited time and could be revoked promptly for violating laws.Corporations were often terminated if they exceeded their authority or caused public harm.For 100 years after the American Revolution(read this Tea Party enthusiasts),legislators maintained tight control of corporate chartering.Stiglitz feels we need measures that focus on how the typical individual is doing.The United Nations Development Programme has devised a more comprehensive measure that includes education,health and income.

One important dimension of societal well-being is security.Today, America is insecure because of the lack of quality jobs and the fear of losing health services.2.4 million have lost health services and some 15 million( third of all mortgages) carry mortgages that exceed the value of their homes.Our administration should have worried less about the corporate safety net and more about forcing the banks to deal with the mortgage crisis.Finally, we have lost trust in each other because we have treated each other poorly.The fissure between Wall St. and Main St. must be mended by regulations that protect the citizens of Main Street(Financial Consumer Protection).We must have a common vision to restore faith and move forward as one nation and see private and public entities working together to bring stability back to our torn nation.