Did you see this paragraph?

"What should be done? "I think we ought to go do what we did in the S&L [crisis] and actually put many of these guys in prison," said Stiglitz."

He's talking about sending people to prison.

Note the headline: Put Corporate Criminals in Jail

Keyword: crooks, not failures

For fraud, a crime. Prison is for criminals... I don't see anywhere in the article where Stigletz says we should punish failure, only repeatedly referring to crimes/criminals being punished/jailed.

Also, read up on the S&L crisis, fraud was a big factor: Fraud and insider transaction abuses were the principal cause for some 20% of savings and loan failures the past three years[clarification needed] and a greater percentage of the dollar losses borne by the Federal Savings and Loan Insurance Corporation (FSLIC). http://en.wikipedia.org/wiki/Savings_and_Loan_crisis

So please get your facts straight before you start making up incoherent arguments to attribute to Stigletz and then arguing against your own pretend version of the his position.

Please find another comment to respond I've lost my patience because I'm wasting my time discussing this with someone who obviously doesn't consider facts/reality pertinent to the discussion.

My friend, fraud has been illegal for centuries. Stiglitz is asking for something new to be considered a form of fraud. Please take a moment and think about this clearly. If Stiglitz was simply saying "Fraud should be illegal" then this wouldn't be much of a story, since fraud is already illegal. But Stiglitz is saying "Gambling recklessly with credit should be considered a form of fraud." He wants to take a formerly non-criminal behavior and treat it as a form of criminal behavior.

Actually, in this specific case, some of the practices of Wall Street were previously criminal. For example, up until 2004 there were laws that limited bank leverage to iirc 12:1 (or was it 14:1?).

Hank Paulson lobbied for that limit to be removed, unsuccessfully in 2000, then successfully in 2004. That banks and financial entities were levered up to 30:1, 40:1, even 60:1 on toxic securities when the crisis occurred grossly exacerbated it.

So essentially, 'gambling recklessly with credit' was indeed, for a long time, illegal. It was only Wall Street's increasing influence in Washington that got it legalized.

Skymarshall:

Yes, but in the old days, if a bank went over the leverage limit that the government had set, then the bank got fined, and was required to rapidly deleverage. No one went to jail.