Friday, December 19, 2008

How it happened ...

No time to sit and bitch this morning so I'll direct you to Krugman, who has a great essay up on the how and why of the financial mess we're in:


Meanwhile, how much has our nation’s future been damaged by the magnetic pull of quick personal wealth, which for years has drawn many of our best and brightest young people into investment banking, at the expense of science, public service and just about everything else?

Most of all, the vast riches being earned — or maybe that should be “earned” — in our bloated financial industry undermined our sense of reality and degraded our judgment.

Think of the way almost everyone important missed the warning signs of an impending crisis. How was that possible? How, for example, could Alan Greenspan have declared, just a few years ago, that “the financial system as a whole has become more resilient” — thanks to derivatives, no less? The answer, I believe, is that there’s an innate tendency on the part of even the elite to idolize men who are making a lot of money, and assume that they know what they’re doing.


This mess didn't surprise folks like Krugman and those of us who've been running around last few years with our hair on fire. I just figured the bottom would fall out sooner.

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