Unfortunately CNBC hasn't enabled the video for embedding, but if you follow the link, you can watch the five minute discussion. He always makes so much sense when he talks yet for some reason, the White House keeps siding with Wall Street instead. One very interesting tidbit from the interview is when he talks about the median income in the US dropping 4% in the last decade. Wow. The only changes with distribution of wealth in the US has been squeezing the middle and the poor to the advantage of the wealthiest Americans. Even then, somehow the Democrats have managed to lose that debate to the Republicans who scream "socialism."
Critics of increased regulation for banks said this would stifle innovation, but Stiglitz argued that it is difficult to see how the innovative banking products in the past 10 years helped society.Exactly. How brilliant was that "innovation" when nobody in senior management had any idea what was going on? The only thing they understood was the bonus money that piled into their bank account.
"You ask what was the social value of the CDO squares? They were doing things we should have known were stupid," he said.
A CDO square is a derivative where a collaterlized debt obligation is used to invest in other collateralized debt obligations.
