Not a Crisis of Confidence

Posted by: Michael Mandel on October 28

I have a new online story. Here’s a piece of it:

But what if the Bernanke-Paulson view is wrong? What if financial stress is a symptom, not a cause?

What if we face a wrenching readjustment of the global real economy rather than a crisis of confidence rooted in the financial system? What if Bernanke and Paulson are treating the wrong problem? What if investors, realizing that their long held assumptions about the global economy are wrong, are rationally bailing out of stock markets in almost every country, at least for now?

In fact, there’s good reason to believe that the current crisis reflects a growing realization: Long accepted patterns of cross-border technological transfer, foreign trade, and global finance are simply not sustainable

Take a look.

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Reader Comments

Keith G

October 28, 2008 03:08 PM

Mike,

Is Bernanke et. al. working on the wrong problem or the first problem? I think when you go to the doctor they often treat the symptoms and then the disease. You may be right, but not right - now.

I think a better question to ask is what needs to happen to improve the pattern "of cross-border technological transfer, foreign trade, and global finance" to make them better?

Because of the 'long accepted patterns' of globalization wealth is much greater in the world and a new global workforce of billions have been educated and trained to dream-up new products and services for all. If these patterns need to change, and they likely do, how do they need to change? What needs to happen to make life on earth better?

LAO

October 28, 2008 08:52 PM

You obviously struck a chord with this article. Now that you've convinced us of the direction of the future and that the key is innovation, where do we send our ideas? :)

Truly, I think that even the very definition of success and what constitutes the good life could be up for innovative revision, and it could well be a good thing. Excuse me, I guess that is philosophy, not economics.

Thank you for your interest. This blog is no longer active.

 

About

Michael Mandel, BW's award-winning chief economist, provides his unique perspective on the hot economic issues of the day. From globalization to the future of work to the ups and downs of the financial markets, Mandel-named 2006 economic journalist of the year by the World Leadership Forum-offers cutting edge analysis and commentary.

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