The Faith In Deregulation And Reaganism Is Misplaced

Paul Krugman

Photo: Dave Shankbone via Flickr

While I’m talking about inequality and the crisis, I realised 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?

Read the rest here >

NOW WATCH: Briefing videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.