You can buy gold then. Our government would rather print money than selling our 8000+ tonnes gold reserve
On the flip side though would we have had the same amount of economic development that we have had since financial institutions were deregulated from the staid boring times that Krugman talks about? I'm no expert in finance but it seems to me that a lot of the growth in the internet, personal computers and other things was at least partially driven by the availability of cheap credit. Also would we have recovered from the stagflation of the 1970's and early 80's without some level of deregulation?
Yes, there's always a flip side. The Great Depression drove the regulatory climate that existed then, so you have to consider just how badly we didn't want a repeat of that. If slower growth was part of the price, I think it was considered worth it. The best solution, IMO, would have been to ease the regulation a bit, but with care not to go too far. I'm not a financial expert, either, but clearly that wasn't the path chosen. And here we are.
the latest boom years are all about technology, and investment banks will always invest in solid investments. deregulation started in 1999 , well it really started with Reagan, but the mess we are in because of these huge comglomerates started in 1999, when the regulation of the New Deal era began to be slashed. the deregulation that stareted in 1999 allowed for the housing bubble, and the cds trouble.
Reading Krugman's column though he appears to be criticizing deregulation since the 1980's and not just the excesses of the last decade. To follow up on Deckard's post I think there is a fine balance to be maintained. I am very leery of what Krugman is proposing though, nationalization. I think that is a situation where the cure may be worst than the disease.
I think it's a testament to just how bad things are that someone like Krugman would consider taking such steps. With the condition of our financial system being so radically bad, radical steps begin to look reasonable. I agree that we need to be careful.
I think you are just freaking out on the word "nationalization". He is talking about it temporarily as a way to to actually find out what type of debts and assests they have. They would then be recpaitalized if necessary. They would be then resold to private interests. It was done before in Sweden and even in the US with many of the Savings and Loans in the 1980's.
Don't know if this has been posted yet. The Paul Krugman song and video. http://www.youtube.com/watch?v=XOYAuk809fY
