by:
Robert Skidelsky, Project Syndicate
| Op-Ed
The financial crisis that started in 2007 shrunk the world economy by
6% in two years, doubling unemployment. Its proximate cause was
predatory bank lending, so people are naturally angry and want heads and
bonuses to roll – a sentiment captured by the current worldwide
protests against “Wall Street.”
The banks, however, are not just part of the problem, but an essential
part of the solution. The same institutions that caused the crisis must
help to solve it, by starting to lend again. With global demand
flagging, the priority has to be recovery, without abandoning the goal
of reform – a difficult line to tread politically.
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