But I myself have a bias that should be obvious to readers. I beg my readers to correct it.
I feel that some experts (Paul Krugman, Nouriel Roubini, Charles R. Morris, Steve Waldman, Mike Hudson, Paul Kasriel, Mike Whitney and Jim Willie) coming from the left wing were RIGHT and that other experts (Larry Kudlow, Larry Summers, Glenn Becker, Robert Rubin, Ben Bernanke and Hank Paulson) coming from center or center-right were WRONG in their assessments of the health of Amercan and global economies in recent years. And when it comes to resolving the crisis, it seems that the guys who were wrong are closer to Barack Obama at the moment than the guys who correctly predicted the global meltdown two, three or even four years ago.
So this post and this site needs input from center and right ring orientations. Specifically, who from these orientations saw the credit crisis coming?
OK, here we go. The crisis is being resolved in two phases, short and long term. We are now in the midst of a short term triage to stabilize the economy. This will lead to some kind of long term cure to restore American and global economies to maximum health.
But there's a danger: that of stabilizing the economy today in ways that ensure future repetitions of the credit crisis. Perhaps there's no alternative to such crises: perhaps financial bubbles are inherent to the so-called virtuous and vicious phases of the business cycle, as economist Hyman Minsky argued. And perhaps none exists on the spectrum of economic options that runs from total communistic/socialistic state command economies on the far left to pure unregulated free-market consumer capitalism on the far right.
Is it necessary, then, or even possible, for professional economists and central planners to think outside the box of this spectrum? It certainly won't be easy, for this spectrum seems to have contained all economic thought since the days of David Ricardo, Adam Smith, Karl Marx, Friedrich Hayek, Joseph Schumpeter, John Maynard Keynes, Milton Friedman and of course Hyman Minsky.
SHORT TERM Getting out of the mess we're in now (weathering the storm). Stabilizing American and global economies and financial systems within the next 12 to 24 months. Getting existing credit systems to work (assuming they can work) even as Paulson, Bernanke and central bankers worldwide take extreme and untested steps to do so.
- A Path to Economic Recovery Column by Charles R Morris
- What Should Be Done? Link to a 30 min. audio presentation by James K. Galbraith
- Bernanke's plan to clean up banks
- Martin Wolf critiques the Obama Recovery Plan (1/14)
- Economist Dean Baker proposes a tax on financial transactions (Bob Herbert op ed)