A comparison of factors leading to the current economic situation with five historical crises: "Given the severity of most crisis indicators in the run-up to its 2007 financial crisis, the United States should consider itself quite fortunate if its downturn ends up being a relatively short and mild one."

Source document here. "The first major financial crisis of the 21st century involves esoteric instruments, unaware regulators, and skittish investors. It also follows a well-trodden path laid down by centuries of financial folly. Is the 'special' problem of sub-prime mortgages this time really different?"

Comments

[JAT]

"...Yesterday, in the NYT, Paul Krugman linked this paper to an interesting and perhaps unique factor regarding the 2008 presidential contest. None of the remaining 3 contenders -- McCain, Obama or Clinton -- are economic ideologues. No supply-siders in this group, no one from the Democratic old school...."

This is false. Clinton is as tied to Big Labor and envy of the Euro-style maximum welfare state as a candidate can possibly be -- the Hillary Santa handing out federal program after federal program was just the most obvious manifestation of her dogma.

McCain is a crank and loon suspicious of wealth creation in general. I could totally see him going for wage-and-price controls were inflation to overshoot. In short, strictly an-onion-on-his-belt economic world-view. Scary.

Obama comes CLOSEST to fitting this description, but even so has flirted with the idea of exploding the payroll tax wage cap, a huge marginal tax hike on the most productive workers, all to explicitly fund programs we can possibly afford given current and future benefits. He can do better.

The real tax reform option that JOHN KERRY could've used is still out there: Kerry need not even propose a tax overhaul that moves him "rightward" in the conventional sense. Back a consumed-income tax, with all savings exempt from tax, together with an end to all forms of corporate welfare on both the tax and spending side, and Kerry could frame his proposal as a bottom-up reform of Bush's corporatist leanings.

[Ed Cone]

JAT, whatever Clinton's ties to labor, the power of labor itself is greatly diminished, and it takes a supreme effort to look at the Rubinomics of the '90s and discern slavish devotion to old school Democratic policies. Your disdain for McCain is what it is, but the guy is not an economic ideologue.

You may dislike the candidates for their economic ideas and other reasons, but you are not really rebutting the statement as written, or addressing its actual point, which is that our next president might just have a hell of mess on his or her hands.

[Jeffrey Sykes]

I heard supply sider Jack Kemp say last week that he was advising McCain on economics and supports tax policy.

Podcast date Feb. 6.

I also found the article linked to in this post very informative.