The Great Game of Chicken Continues
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  • Gene

    Assuming this analysis is correct, it comes down to democracy vs. expediency: Prevent near-term suffering (possibly very great suffering) by, over the long term, sacrificing the rights of ordinary people to have a say in the way they’re governed. I don’t claim that this is an easy choice by any means, but beware anyone who would jump too readily on the top-down, damn-the-parliaments bandwagon. Someone like Thomas Friedman, for instance, who swoons over the ability of the authoritarian Chinese government to “get things done.”

  • Let’s see, we’ve had 4 or 5 years of economic stagnation already, looks like 4 or 5 more years ahead. Those who predicted a lost decade (I wasn’t one) may have been right.

  • vanderleun

    Urr…. ahh….. “even the kind of united and strong leadership Europe has yet to develop….” We might not want to be so quick in urging that particular sort of political development as far as Europe is concerned. Remember what happened the last time “united and strong leadership ” became fashionable in Europe? Of course you do. Don’t you?

  • Otiose8

    The problem in Europe is that they have been living beyond their means for decades and financing the difference with debt, and when debt capacity became strained they structured banking rules so that they could stuff their banks with even more debt.

    Now the banks have reached their limits. So the problem has been magnified greatly. It has nothing to do with the common currency (except so far as it helped make using banks easier).

    The solution is to adjust the standard of living to fit income.

    Putting Europe’s leaders in a room until they come up with a solution won’t work primarily because the solution in this case means we want our cake and to eat it too.

    Like Dorothy they have always had the solution ready at hand. They just lack the will to implement it.

    “It is difficult to get a man to understand something when his job depends on not understanding it.” Upton Sinclair (1878 – 1968)

  • Eurydice

    I share Ms. Lagarde’s frustration but can’t help feeling that the IMF is one of the most misguided and destructive organizations on the planet, so I don’t place much value on her definition of a clear, credible path to safety.

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