donheff
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
After discussing "what would real reform look like," I found the following article by Paul Krugman quite interesting. I hesitate to post because I know Krugman is viewed as a liberal economist and thus may provoke flames but I like his take on the issues confronting reform and am interested in what others think of it.
Six Doctrines In Search Of A Policy Regime - Paul Krugman Blog - NYTimes.com
He breaks the causes of the current crisis into six possibilities and discusses each of them in turn. Here is a quick take on it from the article but it is worth reading the details. It isn't very long:
Six Doctrines In Search Of A Policy Regime - Paul Krugman Blog - NYTimes.com
He breaks the causes of the current crisis into six possibilities and discusses each of them in turn. Here is a quick take on it from the article but it is worth reading the details. It isn't very long:
Now, I have a personal opinion: basically, I believe in view #2, with some allowance for #3 and #4 too. But before I defend my version, let me lay out the list of candidates for explaining the mess we’re in. Later on, I’ll also describe three visions of financial reform, again along with my personal preference.
So: what’s the problem? Here are the views I see out there.
- Size: Our largest financial institutions have just gotten too big
- Shadows: The rise of shadow banking, institutions that fulfill banking functions but evade the regulatory regime, has undermined stability
- Opacity: We’ve come to rely on complex financial instruments that neither regulators nor the private sector
- Predation: Financial firms deliberately misled consumers and investors
- Government intervention: Public policy pushed lenders into making bad loans, especially to the poor
- Monetary mismanagement: The Fed did it by keeping interest rates too low for too long, and/or policymakers panicked in 2008 and spooked the markets
So: what’s the problem? Here are the views I see out there.
- Size: Our largest financial institutions have just gotten too big
- Shadows: The rise of shadow banking, institutions that fulfill banking functions but evade the regulatory regime, has undermined stability
- Opacity: We’ve come to rely on complex financial instruments that neither regulators nor the private sector
- Predation: Financial firms deliberately misled consumers and investors
- Government intervention: Public policy pushed lenders into making bad loans, especially to the poor
- Monetary mismanagement: The Fed did it by keeping interest rates too low for too long, and/or policymakers panicked in 2008 and spooked the markets