On the heels of a lot of good (or not-so-bad) economic news, even Paul Krugman notes that the markets are recovering:
Cross your fingers, knock on wood: it’s possible, though by no means certain, that the worst of the financial crisis is over. That’s the good news.
Krugman is said to have predicted fifteen of the last two recessions (or something like that), so it has to be a good sign if even he sees things getting better. Of course, in Krugman’s bizarro world, good news is bad news:
The bad news is that as markets stabilize, chances for fundamental financial reform may be slipping away. As a result, the next crisis will probably be worse than this one.
You see, when the markets were tanking, the progressives had a good shot at extending more governmental control over financial markets. Now he fears that’s no longer in the cards. That means that all that excess freedom is likely to stay out there:
Wall Street did an end run around regulation, using complex financial arrangements to put most of the business of banking outside the regulators’ reach. Washington could have revised the rules to cover this new “shadow banking system” — but that would have run counter to the market-worshiping ideology of the times.
When they can, humans always do “end runs” around government curtailment of their freedom. Actually, I think Krugman understands this, but sees it as an arms race, one in which his side is falling behind.
(Via the Corner.)
