Excellent post by Paul Krugman

Here is one bit:

This is actually a very broad problem with all accounts of the crisis that try to exonerate the private sector and place the blame on the government and/or the Fed: none of the proposed evil deeds of policy makers were remotely large enough to cause problems of this magnitude unless markets vastly overreacted. That is, you have to start by assuming wildly dysfunctional financial markets before you can blame the government for the crisis; and if markets are that dysfunctional, who needs the government to create a mess?

Here is another:

*I find myself thinking of the old comedy routine in which a doctor tells his patient, “You’re a very sick man; the least shock could kill you” – whereupon the patient lets out a strangled cry and drops dead.

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