The response to this downward spiral on the part of the world’s two great monetary powers ”” the United States, on one side, and the 15 nations that use the euro, on the other ”” has been woefully inadequate.
Europe, lacking a common government, has literally been unable to get its act together; each country has been making up its own policy, with little coordination, and proposals for a unified response have gone nowhere.
The United States should have been in a much stronger position. And when Mr. Paulson announced his plan for a huge bailout, there was a temporary surge of optimism. But it soon became clear that the plan suffered from a fatal lack of intellectual clarity. Mr. Paulson proposed buying $700 billion worth of “troubled assets” ”” toxic mortgage-related securities ”” from banks, but he was never able to explain why this would resolve the crisis.
Kendall, This American Life did a spectacular show on the roots of the crisis and how serious it is a couple days ago. “Another Frightening Show about the Economy” aired on October 6th. It’s pretty interesting, and free from partisan politics.
Thanks, John, I really like that program. I shall investigate. Did you know they have a televised version now? I tried it once in the visual way, and found I still like the audio better.
I did know that, but I haven’t been as intrigued. To me, the Radio show is as close to perfection as possible. The first one on the crisis “the Great Pool of Money” does a great job of linking world-wide economic development, the fed, wall street, mortgage lenders and the poor all together.
As always, I appreciate this site and your management.