Recent articles in some of the top newspapers and journals suggest that finally the fear psychosis that clouded our understanding of the global financial crisis and particularly the tools to deal with it is slowly lifting. I am going on a limb and picking the WSJ article by Paul Kennedy as the turning point. The title of the article is American Power is on the Wane but the important part of it is about global crisis. So 14 January is the date on which the tide has turned in my opinion.
I now suspect that Obama Administration would begin to show signs of this new understanding. Within the first couple of weeks in the office, we should hear a different message than has been common so far. How would we know this? There won’t be a second bailout package. Instead tax cuts would begin to occupy the discussion on pump priming. Focus would be on structural and regulatory changes and disclosure norms.
Let’s see.
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The opinions expressed in this essay are those of the authors. They do not purport to reflect the opinions or views of CCS.
