We Were Cooking This Over a Long Time

Another great short overview of the crisis comes from Martin Wolf, chief economic correspondent of the Financial Times. He is an excellent teacher, and is absolutely furious.

Compare it to Rick Wolff's. M Wolf stresses the interconnected mechanics. R Wolff stresses the motives behind the financial engineering that M Wolf also laments. R Wolff claims that household indebtedness was a deliberate attempt to maximize short-term profits (including the profits of non-financial companies) by replacing salary increases with debt - we won't pay you more, but we'll let you borrow more to maintain your middle-class life. This goes to far for a mainstream analysis like M Wolf's, no matter how critical M Wolf is, for R. Wolff is suggesting that capitalism was failing and toxic finance was dirty chemotherapy that extended its life, and for M Wolf capitalism was succeeding until it was hijacked by bad actors and lazy, stupid, complicit governments.

The difference between them is important. If M Wolf is right, we should spend our trillions on a repair job. If R Wolff is right, we need to invent a new economic system, starting with the financial sector.

In my reading M Wolf's interconnected case supports R. Wolff's thesis.