Thursday, 25 June 2009

The economic crisis: merely moral?

Paul St Amour was asking, in his paper, whether the current economic crisis is merely moral. Is it merely greed and irresponsibility that is at the root of this crisis, as President Obama seems to imply? And if so, is it merely a question of determination, of the will to overcome? St Amour thinks not. He, together with a range of economists (I think he mentioned Martin Wolff, Gillian Ted, Kevin Philips, James Fowles, Henry Haslett, Simon Johnson, Stephen Roach, Richard Duncan), believes that the prime cause is not greed but ignorance, or the lack of proper understanding of what has been going on. Many of these economists, together with Lonergan, are what St Amour calls 'realists': i.e., they believe that the real economy is the production economy, and that financial services and derivatives are precisely that: derivative.

I am no expert at all, but this does seem to vibe with what a Nashik friend says: that no one seems to really know what is going on, and that everyone becomes an expert after the fact.

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