December 24, 2009

TOO ADAPTABLE FOR ITS OWN GOOD:

History is Still Over: How capitalism survived the crisis (Francis Fukuyama, 12/07/09, NEWSWEEK)

Today, around the end of Barack Obama's first year in office, both the danger and the opportunity seem to have evaporated. What is striking is how little about the pre-crisis world has changed. Deft handling of economic policy by the Federal Reserve and the Treasury Department under both Bush and Obama prevented the crisis from degenerating into a 1930s-style meltdown. (Even the decision to allow Lehman Brothers to go bankrupt, attacked by many, probably helped prepare the ground for the broader finance-sector rescue to come.) Although unemployment remains intolerably high, signs of recovery abound, and confidence is returning both to consumers and businesses. Globally, the recovery has been even faster, with China, South Korea, Brazil, and others enjoying an amazing rebound in exports.

But hold the applause. Even the good news isn't all good. In an odd way, the recovery may have come too soon—since it's meant that the crisis never got bad enough to force the kind of lasting solutions the United States, and the world, badly needed.


Turns out, a glitch is only a crisis if bad policy makes it one. Fortunately, W and his Fed Chairman, Ben Bernanke, were at the helm.

Posted by Orrin Judd at December 24, 2009 1:08 PM
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