Why the economy is in the mess it is in!

Source: "The Quiet Coup," Simon Johnson, The Atlantic, May 2009.

The crash has laid bare many unpleasant truths about the United States. One of the most alarming, says a former chief economist of the International Monetary Fund, is that the finance industry has effectively captured our government—a state of affairs that more typically describes emerging markets, and is at the center of many emerging-market crises. If the IMF’s staff could speak freely about the U.S., it would tell us what it tells all countries in this situation: recovery will fail unless we break the financial oligarchy that is blocking essential reform. And if we are to prevent a true depression, we’re running out of time.

Comment: I seldom see a graph with as vivid a message as that above. The managers of financial organizations got rich as their companies did more and more business. Unfortunately, as we now know, they did more and more business by doing more and more risky business in an environment where the people of this country were encouraged by a wide variety of government policies to consume and consume rather than to seve and invest! Now the bill is due. Unfortunately I fear it is not the executives of the financial industry that will pay, but rather it will be future generations of Americans -- our children and grandchildren. JAD