Paul Krugman:Another Temporary Fix

[cal04]

http://www.nytimes.com/2008/07/28/opinion/28krugman.html?ref=opinion

So the big housing bill has passed Congress. That’s good news: Fannie and Freddie had to be rescued, and the bill’s other main provision — a special loan program to head off foreclosures — will help some hard-pressed families. It’s much better to have this bill than not.

But I hope nobody thinks that Congress has done all, or even a large fraction, of what needs to be done.

This bill is the latest in a series of temporary fixes to the financial system — attempts to hold the thing together with bungee cords and masking tape — that have, at least so far, succeeded in staving off complete collapse. But those fixes have done nothing to resolve the system’s underlying flaws. In fact, they set the stage for even bigger future disasters — unless they’re followed up with fundamental reforms.

(snip)
The moral of this story seems clear — and it’s what Barney Frank, the chairman of the House Financial Services Committee, has been saying for some time: financial regulation needs to be extended to cover a much wider range of institutions. Basically, the financial framework created in the 1930s, which brought generations of relative stability, needs to be updated to 21st-century conditions.

[BlooInBloo]

1. Good to have the good-Krugman back.

[Briar]

2. He

was never gone. You just didn't like what he was saying. Such fickleness.

[applegrove]

4. I'm glad he is once again writing about the economy and not about politics.

There are enough political pundits out there. I looke forward to more from Krugman.

[Doctor_J]

3. Next time Andrea Mitchell is on camera shilling for McSame,

just remember that her husband is the single person most responsible for this disaster.