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| Permalink View Article Stats (1 comment) Paul Krugman and Robin Wells: The Busts Keep Getting Bigger: Why? Quicklink submitted by Joan Brunwasser (Add your own quicklinks easily with the OpEdNews Quick Link Browser bookmark) |
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| The cycle of financial overreach, crisis, and bailout is that it was not always thus. The US emerged from the Great Depression with a tightly regulated financial sector, and for about forty years those regulations were enough to keep banking both safe and boring. And for a while—with memories of the bank failures of the 1930s still fresh—most people liked it that way. Over the course of the 1970s and '80s,however, both the political consensus in favor of boring banking and the structure of regulations that kept banking safe unraveled.This was, then, an enormous bank-led crisis—soon followed by the savings and loan crisis, which had a higher direct cost to taxpayers than even the current crisis. And the response of the political system to these crises was… to shower more favors on the financial industry, dismantling what was left of Depression-era regulation. |
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change in "political consensus"?
by Josh Mitteldorf on Sunday, Jun 26, 2011 at 8:29:32 PM