12 June, 2009

Cycles and reforms

There's a very good discussion at The Baseline Scenerio (an all-around source for thought on the financial crisis). The short form: the US has done as well as it has because of the rule of law, but this has been undermined on more than one occasion by corruption and the concentration of power. Although there can still be "banana booms" (I love that term--comparing the current structure to banana republics), they aren't sustainable. These problems have led to course corrections in the past (under Johnson, TR, and FDR), but it isn't easy, and the reform period has averaged five to ten years. If it can't be fixed, we are doomed to a cycle of "oligarchy-boom-bust-oligarchy".

Global Crisis And Reform: Starting A Long Journey « The Baseline Scenario

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