As the quintessential laissez-faire system, the US outsources strategy to the invisible hand of the market, with the government locked into a reactive approach to unexpected problems. Thus, both monetary and fiscal policy have been focused on cleaning up after a crisis rather than on how to avoid another one.Project Syndicate
America’s Strategy Vacuum
Stephen S. Roach | formerly Chairman of Morgan Stanley Asia and the firm's Chief Economist, and currently a senior fellow at Yale University’s Jackson Institute of Global Affairs and a senior lecturer at Yale’s School of Management
2 comments:
As the quintessential laissez-faire system, the US outsources strategy to the invisible hand of the market, with the government locked into a reactive approach to unexpected problems. Thus, both monetary and fiscal policy have been focused on cleaning up after a crisis rather than on how to avoid another one
I don't know if its "laissez-faire" when the clear policy after the ship hits the iceberg is "lifeboats for the rich and well-connected only." It seems that we have a rather pro-active policy to make sure that the well off suffer no inconvenience regardless of whether this leads to another crisis or not. I suppose, though, that is what is meant nowadays by "let the market decide."
David, I assume that this is what Roach means when he says that govt is locked into a reactive position...focused on cleaning up after a crisis."
It's laissez-faire with moral hazard.
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