Tuesday, September 15, 2009

Reforms that Weren't, Reforms to Come

President Obama's speech about reforms in the financial sector was disappointing, to put it mildly.  There were no plans for implementation and no ongoing developments that might actually change the system that blew things up. The consumer agency has nothing to do with stopping problems with overleveraging, opacity, internal fragility, and the unbelievable social costs of the extreme profits involved in financial speculation. Obama appears to be assuming a trickle-down recovery, although evidence at the state level is very much to the contrary. See California's tax revenue stream, for example:

I assume folks who track spreads in lending rates, loan volume and the like could clarify the "two economies" divergence that is crushing a lot of regular folks. You'd think Obama would at least have figured out that the backlash against his health care reforms are fueled by very reasonable economic fear and panic enabled by his non-existent financial reforms.

There's more hope in the report of the Stiglitz commission to the French government on moving from narrowly economic to broader measures of social progress.   See also the interesting papers on the commission's website.

It would be nice to be able to say at some point in my lifetime that the US was back on the front lines of economic thinking. That time still looks a long way off.

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