You’ll find a mix of good and bad in Fareed Zakaria‘s latest Newsweek cover story on the future of capitalism.
What struck me as particularly interesting was the following passage:
Consider our track record over the past 20 years, starting with the stock-market crash of 1987, when on Oct. 19 the Dow Jones lost 23 percent, the largest one-day loss in its history. The legendary economist John Kenneth Galbraith wrote that he just hoped that the coming recession wouldn’t prove as painful as the Great Depression. It turned out to be a blip on the way to an even bigger, longer boom. Then there was the 1997 East Asian crisis, during the depths of which Paul Krugman wrote in a Fortune cover essay, “Never in the course of economic events?not even in the early years of the Depression?has so large a part of the world economy experienced so devastating a fall from grace.” He went on to argue that if Asian countries did not adopt his radical strategy?currency controls?”we could be looking at?.?.?.?the kind of slump that 60 years ago devastated societies, destabilized governments, and eventually led to war.” Only one Asian country instituted currency controls, and partial ones at that. All rebounded within two years.
Rather than listen to these guys, it might make sense to rely on those who have had greater success pointing to the real problems in the economy.
