Friday, July 17, 2009

Krugman Unleashed: Obama Administration Has Made Another Financial Crisis More Likely


Paul Krugman has gone easy on the Obama Administration in the past several weeks with only mild criticism and soft-pedaled warnings about the ongoing financial crisis. But record profits just reported by Goldman Sachs have set the Nobel-prize winning economist off this morning. In today’s NY Times op-ed, Krugman writes:

The American economy remains in dire straits, with one worker in six unemployed or underemployed. Yet Goldman Sachs just reported record quarterly profits — and it’s preparing to hand out huge bonuses, comparable to what it was paying before the crisis. What does this contrast tell us?

First, it tells us that Goldman is very good at what it does. Unfortunately, what it does is bad for America.

Second, it shows that Wall Street’s bad habits — above all, the system of compensation that helped cause the financial crisis — have not gone away.

Third, it shows that by rescuing the financial system without reforming it, Washington {the Obama Administration} has done nothing to protect us from a new crisis, and, in fact, has made another crisis more likely.

If you can stand to read more, go here.

No comments:

Post a Comment