Arianna Huffington: Financial crises are a lot like childbirth -- they both involve a lot of pain and end up costing you a lot of money. But, after a while, you forget about all the negatives and are ready to do it again. This propensity to forget, so useful when it comes to having babies, is incredibly destructive when it comes to our economy. So why do we do it? According to John Kenneth Galbraith, it's a combination of "the extreme brevity of the financial memory" and a general ignorance of history. As a result, boom and bust cycles are repeated endlessly -- and so is the response, in which reforms are proposed but, as the public's anger -- and memory -- weakens, so does the "reform." By the time reform measures are passed, lobbying has weakened them enough to make another crisis inevitable. Exhibit A: the JPMorgan trading loss and the renewed the battle over the Volcker Rule.
Thursday, May 24, 2012
Thursday's Daily Brief: GM Recall, Warren and Brown Neck and Neck, Romney Avoids Bain, Plus Arianna Huffington, Robert Reich, Conrad Black
at 11:01 AM