November 18, 2013
Welcome to the Perpetual Crisis Blog
In 2009 Fed Chairman Ben Bernanke defended the multi-trillion dollar bank bailouts that began under the Bush administration, explaining “it wasn’t to help the big firms that we intervened…when the elephant falls down, all the grass gets crushed as well.”
Today, the elephants are larger than ever and the grass is still crushed. The top banks are bigger and still borrow excessively in the short-term and overnight markets leaving them vulnerable to runs. But, let’s be clear. For most Americans, it’s not a question of when the next crisis will hit, but when this one will end.
Is the new normal for the U.S. economy a “permanent slump” as Paul Krugman suggested in a recent op-ed column? Krugman asked: “What if depression-like conditions are on track to persist, not for another year or two, but for decades?”
I hope you will join me here as I focus on what can be done to promote financial stability and shared prosperity.