Fixing the Financial System
If . . taxpayer funds end up providing windfalls to financial operators instead of fixing what needs to be fixed, we might not have the money to go back and do it right. And the lesson of Ireland is that you really, really don’t want to put yourself in a position where you have to punish your economy in order to save your banks.
–Paul Krugman, “Erin Go Broke,” The New York Times; 4/20/09
Too often, op-ed pieces discussing the financial system are impenetrable. Written by economists for economists, they leave the general public in a fog.
Krugman is one of the few economists whose pieces are (in my opinion) both consistently on target, and readily accessible — none more than today’s. (I’m not automatically a fan of every economist who has a Nobel prize on his mantle, but in Krugman’s case, it’s well deserved.)
If you don’t understand what’s been happening, Krugman boils it down to as succinct a two-sentence summary as I’ve seen (the rest of the piece discusses Ireland’s terrible predicament, whose ultimate financial sin was “being just like us, only more so”).