David Warsh, perceptive economic journalist and innovative blogger at Economic Principals, says today "It is becoming clear that the US is indeed facing its most serious economic crisis since 1932." That's gotta make you ponder economic history.
Personally, I blame Ronald Reagan. The housing crisis this year, and the ABCP crisis last year, and the Enron crisis a few years ago, and the savings-and-loan crisis of the Reagan era are all consequences of the policies of deregulation, lax regulation, and complicit regulation, for which Reagan was the great symbol and advocate. The wounds being suffered by the US economy are largely self-inflicted.
Warsh, ever balanced, notes that "for a quarter of a century, growth-oriented policies of deregulation, restructuring and openness have legitimately gained ground because most people have preferred being richer to being more fair." But the price the US pays for this devil-take-the hindmost race for personal enrichment is all these economic crises created by regulatory failure. it's hugely counter-productive.
