The “Muddle-Through Strategy”
What we’re really seeing here is a decision on the part of President Obama and his officials to muddle through the financial crisis, hoping that the banks can earn their way back to health . . . maybe we can let the economy fix the banks instead of the other way around.
–Paul Krugman, “Stressing the Positive“; The New York Times (5/8/09)
No, there’s been no official pronouncement, but as Krugman details, the administration has clearly adopted what pundits are calling “the muddle-through strategy.”
A similar approach worked in the early ’90’s, after U.S. banks suffered from the collapse of commercial real estate.
Will it this time?
Again, Krugman cuts to the quick.
Whether or not you benefit from Washington’s solicitous approach to the big banks “depends on who you are: a banker, or someone trying to make a living in another profession.”