Wise Words

The final area where we need a change in national policy is the area of fiscal stimulus. Members of both political parties in Washington seem to be intent upon throwing money at the problems on Wall Street and on Main Street, in that order of priority. Most of the initiatives being proposed will have no effect on developments in the credit sector or in the wider economy, including a peak level of loss for the banking industry that will be a multiple of the credit trough in the early 1990s and a decline in GDP that could extend into 2010.

via Bust, Bankruptcy, Bailouts: What Should We Do Now? | The Big Picture.

These wise words from Mr Whalen are part of a four part set of recommendations about the whole economic mess. Part #1 deals with the banks, part #2 deals with Credit Default Swaps (pretty wonky), part #3 deals with accounting (really wonky), and part #4 deals with fiscal stimulus.

There are a lot of smart people thinking about these issues, but there are two problems:

  1. They don’t seem to agree on much
  2. None of them are in Washington
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