Boom For Whom
While I’m talking about inequality and the crisis, I realized recently that there’s another channel not usually talked about, via the misperception of success.
Let me start with a puzzle: why did faith in the wonders of financial deregulation persist so long?
After all, if you step back from the record, deregulation began producing disasters from early on. Early deregulatory moves helped bring on the Latin American debt crisis of the early 1980s; Garn-St. Germain produced the savings and loan debacle; freed-up capital flows produced the Asian crisis and LTCM; and now we have the great bust. So why were Very Serious People so convinced that it was a good thing?