Paul Krugman: Snoopy the Destroyer

Has Snoopy just doomed us to another severe financial crisis? Unfortunately, that’s a real possibility, thanks to a bad judicial ruling that threatens a key part of financial reform.

Some background: When catastrophe struck the troubled U.S. financial system in September 2008, the proximate cause was the looming collapse of three companies — none of which were banks in the normal sense of the word, that is, institutions that take deposits and lend them out. One of them was, of course, Lehman Brothers; the other two were The Reserve, a moneymarket fund, and American International Group, or A.I.G, an insurance company.