Stiglitz is correct that Banks are Robin Hood in reverse and what we have just witnessed is a huge transfer of Wealth from the Lower and Middle Classes to the Banking Elite. Everything else in the article does not make any sense at all. To be clear: We are not in a Free Market Economy. We are in a 'Managed Economy', a badly Managed Economy at that, as all Managed Economies are. Stiglitz is for Big Interfering Government which loads the playing field in favour of those who are in favour. If you take tax of one group another unseen group suffers and the Free Market Decision is transferred from the hidden group to the Governments favoured group who are inefficient or they wouldn't need the hand out. This is called Crony Corporatism.
How is helping struggling homeowners going to work? Taking Taxes of of the wealth generators to subsidise those who paid way over the top for their house? You cant afford the mortgage and keeping you afloat is only putting off the day of reckoning and costing tax payers a fortune. Get out, buy back in when house prices drop to 1995 levels that you can afford. Price controls have never worked and were the main reason the 1929 depression dragged on for so long. Farmers were paid to plough crops back into the ground whilst the population queued at soup kitchens. If the Government had got out of the way the Depression would never had occurred. The recession of 1920-21 is the classic example of Free markets working when a stroke incapacitated Woodrow Wilson was unable to Bail Out the Banks. President Harding continued the policy of allowing the Mal-Investment to be purged from the system. The 1920-21 recession lasted 18 months and set the sound base for the roaring Twenties. Stiglitz wont like to be reminded of that episode. Putting Banks and Stiglitz in a Free Market would sort the wheat from the chaff very quickly. With most of the bureaucrats/politicians millstone costs gone and taxation reduced to the 5% levels that the Elite pay via Offshore Tax Havens that are out of the reach of most of us. Even major Corporations are given tax breaks to this level, threatening to relocate while the rest of us pay 20% Corporation Tax. Good riddance to them I say.
Austrian Economists, like Ron Paul, Peter Schiff and Thomas E Woods who predicted the crisis in 2006, also pointed out what caused it and how to get out of it. Keynesian's wouldn't or couldn't listen to common sense and landed us in a bigger mess that could end up in World War Three, just like the Depression of 1929. 
Stiglitz advocates interfering with Interest rates which is a fundamental mistake. Interests rates are a vital tell tale in the Free Market as low rates signal lots of money is being saved by regular people working, living within their means and being prudent. Businesses see this as a sign of a healthy time to manufacture and expand as people have spare money to buy their goods and services. Savings are known as 'capital' - The essence of the the word 'Capitalsim'. We don't save, we borrow to spend and therefore we have 'Debtism' - the essence of the failed Keynesianism Economics.

If Stiglitz really wants a second round of stimulus after the first one failed, what result does he expect? Cut the Tax Overheads to Businesses and Individuals and see what human ingenuity can achieve in a fraction of the time. Of course that leaves Economists like Stiglitz out there in the Free Market having to earn a real living instead of blaming Free Market Capitalism, that hasn't existed here since the late 1900's, when its the 'Crony Corporatism' of Big Government that is doing all the damage.