In the last two years, nearly everyone has felt the dramatic effects of the global financial crisis.

Developed economies are contracting, and emerging markets are facing slower growth rates. Unemployment is rising rapidly. Aid flows are down. Governments, rather than businesses, are driving economic decisions.

The consequences of this disaster are far reaching and raise a host of questions about the causes and implications.

What factors and institutions contributed to the crisis? Who should be responsible for fixing the economy? How much worse will it get before the economy improves? How much will our lifestyles have to change?

These Carnegie Council resources look at the ethical implications of the financial crisis and explore how the financial system can be rebuilt in a sustainable way that fosters trust and avoids future mistakes.


Economic Crisis: A National and International Perspective
Randy Charles Epping, IFS Project Management AG; Steven Greenhouse, The New York Times
The social contract that created the world's largest middle class appears to be fading fast. What should government, business, and labor do to alleviate the global economic crunch? (Public Affairs Program, April 2009)

Decouple the World from the Dollar
Korkut Ertürk, University of Utah
How can we wean the world off its dependence on U.S. overspending without putting the entire planet in a depression? We could drive a wedge between the global dollars accumulated in foreign reserves and the domestic dollars that the U.S. will be creating at a much faster clip. (Policy Innovations, April 2009)

How to Fail to Recover
Joseph Stiglitz, Columbia University
Obama's recovery efforts are falling short of what's needed to revive financial markets—with important lessons for countries facing similar problems around the world. (Project Syndicate—Policy Innovations, March 2009)

Common Wealth: Economics for a Crowded Planet
Jeffrey Sachs, Columbia University
"Where did this financial crisis come from? What does it mean? How does it translate into the real economy?" asks Sachs. He concludes that this not a Great Depression, and we should look at it as a wakeup call that we were not on a sustainable path. (Public Affairs Program, March 2009)

The Ascent of Money: A Financial History of the World
Niall Ferguson, Harvard University
Does the symbiotic relationship between China and America—"Chimerica" as Ferguson calls it—give reason to hope that America's present economic situation will turn out to be not a crash, but a correction? (Public Affairs Program, November 2008)

The Squandering of America: How the Failure of Our Politics Undermines Our Prosperity
Robert Kuttner, The American Prospect Magazine
For 30 years, the economic condition of most Americans has become ever more precarious. To change this requires a cogent ideology and politics of a managed, rather than laissez-faire, brand of capitalism. (Public Affairs Program, November 2008)

What Should Bretton Woods II Look Like?
Jose Antonio Ocampo, Columbia University
The agenda for international financial reform must include a global system for prudential regulation, an international debt court, and a revamped IMF managing a global reserve currency. (Project Syndicate—Policy Innovations, November 2008)


Restoring Trust in the Global Financial System
Neal Flieger, Edelman; Stephen Jordan, Business Civic Leadership Center; Seamus McMahon, Booz & Company; Christian Menegatti,; and Thomas Donaldson (Moderator), University of Pennsylvania
The panel analyzes the growing lack of trust in the financial system and how it threatens to keep the global economy in the doldrums. What are the ways to best restore that trust? (Workshop for Ethics in Business, April 2009)

Doing the Right Thing: How Organizations Can Help Us Make Ethical Decisions

Art Kleiner, Booz & Company
What kinds of values must we instill in a group to make it easier for people to make the decision to tell the truth? What can we do so we don't have to rely on the ethical compass of individuals? (Carnegie Ethics Online, February 2009)

Raising the Bar for Hedge Funds
Stanley Goldstein, New York Hedge Fund Roundtable; Frank Plantan, University of Pennsylvania
Calls for strict oversight of hedge funds have grown recently, particularly since the arrest of trader Bernard Madoff and other high-profile fraud cases. While new financial regulations may be necessary, establishing internal ethical standards at hedge funds is also crucial. (Policy Innovations, December 2008)

Business Ethics: Setting Constraints and Priorities
Nien-hê Hsieh, University of Pennsylvania
Hsieh discusses personal responsibility, corporate responsibility, and what students can learn from the crisis on Wall Street. (Interviews with Educators, September 2008)

Reconciling Business Ethics Approaches
David Rodin, Oxford University
Rodin analyzes the gap between maximizing shareholder value and respecting stakeholder rights and interests. These obligations might be reconciled by managers raising moral issues for vote at annual meetings, by standardized ratings for corporate behavior, and by increased shareholder activism. ("Free Trade, Fair Trade, and Sustainable Trade: The Case of Resource Extraction," Oxford-Uehiro-Carnegie Council Conference, December 2006)

GLOBAL ETHICS CORNER (90-Second Multimedia Segments)

Here are some recent "Global Ethics Corners" that deal with ethical aspects of the financial crisis. Buy American? Is There a Choice?
Devin Stewart, Carnegie Council
While saving jobs is an urgent task in today's economy, promoting "Buy American" policies may hurt our chances of recovering from the recession. How can we apply the Golden Rule to our trade and consumption patterns? (February 2009)

Choosing between Markets, Regulation, and Rewards
William Vocke, Carnegie Council
How can we resolve the financial melt-down and prevent another? Solutions focus on free markets, regulation, or rewards. Perhaps we should balance all three? How? (January 2009)

Trade Liberalization and the Financial Crisis
William Vocke, Carnegie Council
What does the financial crisis imply? Should we liberalize trade on agriculture and services? Or should we protect domestic producers? (December 2008)

Fear and the Financial Implosion
Joel Rosenthal, Carnegie Council
Will our responses to the financial crisis be constructive, or will panic cloud our judgments? (December 2008)

Market Capitalism Questioned
Devin Stewart, Carnegie Council
Will people associate U.S. power with "global misery" or with the opportunity and pluralism that Obama's victory represents? (November 2008)