«WASTING MONEY PUTS YOU IN A REAL PARTY MOOD»

Q-Hundreds of banks collapsed in the U.S. at that time. Today most of them are being saved by the government. What's so bad about that?

A-The banks that survived 80 years ago continued to lend money. Today many banks aren't lending money anymore, above all the large investment banks. This will deepen the crisis.

Q-The U.S. government's emergency plan is supposed to prevent this, though. The banks receive money from the state so they can continue to give loans.

A-That's the idea, but it doesn't work. We're just throwing money at them and they pay billions of it out in bonuses and dividends. We taxpayers are being robbed for all intents and purposes in order to reduce the losses that some wealthy people bear. This has to be changed.

Q-What do you suggest?

A-We have to reorganize our bailout system for the financial sector. For one thing, any bank that actually lends should get money from the government; more money to small and medium-size banks in smaller towns and less to Wall Street institutions. The government must also accept the consequences when banks become insolvent ...

Joseph Stiglitz
Former chief economist World Bank
Salon.com
April 4 2009