Regulatory reform must move beyond limiting the damage that the financial sector can do and ensure that the sector genuinely serves society.
Interpretation
Regulatory reform should focus on making the financial sector beneficial to society rather than just controlling its negative impacts.
Joseph Stiglitz emphasizes the importance of moving past merely restricting the harmful actions of the financial sector. He advocates for reforms that ensure the financial system actively serves societal needs, thereby enhancing its positive contributions rather than simply limiting its potential for harm.
In practice
During a debate on financial regulations, a speaker might use this quote to highlight the need for more socially-focused financial policies.
Free migration within Europe means that countries that have done a better job at reducing unemployment will predictably end up with more than their fair share of refugees. Workers in these countries bear the cost in depressed wages and higher unemployment, while employers benefit from cheaper labor.
I don't think we can have democracies that work where most of the people are not benefiting economically, where most of the people are worried about their job security.
Let me put it very forcefully: No large economy has ever recovered from an economic downturn through austerity. It's not going to happen in the United States, and it's not going to happen in Europe.
What separates developing countries from developed countries is as much a gap in knowledge as a gap in resources.
One of the arguments I make for the failure of the euro is that, at the time it was being constructed, there was a 'neo-liberal' ideology which said that all we need to do to make this thing work is to get deficits low, keep inflation low, and take down barriers, and then everything would be fine.
Trump sees the world in terms of a zero-sum game. In reality, globalisation, if well managed, is a positive-sum force: America gains if its friends and allies - whether Australia, the E.U., or Mexico - are stronger. But Trump's approach threatens to turn it into a negative-sum game: America will lose, too.
Good economic theory must give the people the chance to use their talents to build their own lives. We must get away from the traditional route where the rich will do the business and the poor will depend on private or public charity.
We must lay hold of the fact that economic laws are not made by nature. They are made by human beings.
At present we are stealing the future, selling it in the present, and calling it gross domestic product.
Economists who adhere to rational-expectations models of the world will never admit it, but a lot of what happens in markets is driven by pure stupidity - or, rather, inattention, misinformation about fundamentals, and an exaggerated focus on currently circulating stories.
Our economy is the result of millions of decisions we all make every day about producing, earning, saving, investing, and spending.
America's downgrade may serve as a wakeup call for its policymakers. It is an unambiguous and loud signal of the country's eroding economic strength and global standing. It renders urgent the need to regain the initiative through better economic policymaking and more coherent governance.
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