In the latest issue of Vanity Fair, economist Joseph Stiglitz makes a simple point that historians everywhere will cheer: In order to craft the future economy, we need to really understand just what went wrong with the current one. His review of the five economic decisions that have gotten the U.S. to its present state is a must-read for anyone affected by the current recession (read everyone).

What I found interesting? Stiglitz doesn't blame what many on the right consider the usual suspects. He doesn't blame former-President Clinton's Community Reinvestment Act which ensured that banks made home mortgage loans to low income communities, and he doesn't hold Fannie Mae and Freddie Mac responsible for the credit melt-down, as they were "late to the subprime game."

Instead he concludes, "The truth is most of the individual mistakes boil down to just one: a belief that markets are self-adjusting and that the role of government should be minimal."

If Stiglitz is right, the current economic data indicates that the consequences of our long-held belief to the contrary will be quite painful.

Nobel laureate economist Joseph Stiglitz paints a grim picture of the global economic outlook for 2008. Stiglitz warns that this is likely to trigger a backlash against the forces of globalization and that:

For those who think that a well-managed globalization has the potential to benefit both developed and developing countries, and who believe in global social justice and the importance of democracy (and the vibrant middle class that supports it), all of this is bad news.

In the end, Stiglitz believes that central banks will be able to restore order after a global slowdown in which the inflationary pressure is wrung out of the system.