What happened to the global economy? We seemed to be chugging along, enjoying moderate business cycles and unprecedented global growth. All of a sudden, all hell broke loose.
There are many theories about what happened, but two general narratives seem to be gaining prominence, which we will call the greed narrative and the stupidity narrative. The two overlap, but they lead to different ways of thinking about where we go from here.
Read it all, and note that the first essay mentioned has already been posted on this blog.
I would have to say that for “stupid” people they sure pulled off the biggest heist in history. Pretty good for stupid people. Simon Johnson is correct. Wall Street took over Washington and used that power to loot the American people. They weren’t stupid, they were very smart, uncaring and greedy. They still are.
I’d use the word “ignorant” over “stupid” insofar as most didn’t know what they didn’t know, financially, namely the systemic risk that was building in real estate given the mandates and incentives pushed for decades by Washington.
Of course, after the ignorance and/or stupidity were made apparent, they knew just where to go to socialize their losses…that’s when the “greed” kicked in (on both sides of the bargain, I might add).
Kendall,
I am not willing to pay for access to the NYT at this point as it’s content isn’t “worth a nickel.” Thus I wasn’t able to read the story- though I am doubtful that I missed much.
JAM