At the risk of re-igniting a certain discussion... here's a great column, I think, by Paul Krugman, about the current economic situation.
http://www.nybooks.com/articles/22151 The most relevant bit: *How did this second great colossal muddle arise? In the aftermath of the Great Depression, we redesigned the machine so that we did* understand it, well enough at any rate to avoid big disasters. Banks, the piece of the system that malfunctioned so badly in the 1930s, were placed under tight regulation and supported by a strong safety net. Meanwhile, international movements of capital, which played a disruptive role in the 1930s, were also limited. The financial system became a little boring but much safer. *Then things got interesting and dangerous again. Growing international capital flows set the stage for devastating currency crises in the 1990s and for a globalized financial crisis in 2008. The growth of the shadow banking system, without any corresponding extension of regulation, set the stage for latter-day bank runs on a massive scale. These runs involved frantic mouse clicks rather than frantic mobs outside locked bank doors, but they were no less devastating.* I'll add one thought that keeps coming to me. If free markets reliably regulate prices, how the heck did we have such a crazy spike in oil prices recently? Surely neither supply nor demand changed much in such a short time. And I haven't seen anybody argue that any sort of government intervention was responsible. I suspect that what we've seen in oil, housing and other bubbles is that we have created a system that amplifies fear and greed. Nick _______________________________________________ http://www.mccmedia.com/mailman/listinfo/brin-l
