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Galbraith:

There seems little question that in 1929, modifying a famous cliche, the economy was fundamentally unsound. This is a circumstance of first-rate importance. Many things were wrong, but five weaknesses seem to have had an especially intimate bearing on the ensuing disaster. They are:

(1) The bad distribution of income. [...]

(2) The bad corporate structure. [...]

(3) The bad banking structure [...]

(4) The dubious state of the foreign balance. [...]

(5) The poor state of economic intelligence. [...]

  1. Highly unequal income distribution. Check.

  2. Weakened corporate system, largely submissive to financial actors. Check.

  3. Cascading margin calls on banks. Check.

  4. Excessive current accounts surplus. Nope.

  5. The conventional economic wisdom out to lunch. Check.

Well, four out of five ain't too bad.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sat Aug 22nd, 2009 at 11:54:56 AM EST

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