Courtesy of LSH’s resident econ expert, Nagasaki. The rest can be found here. He says its the best explanation he’s seen yet for what happened with the mortgage crisis.
Also, I’ve been reading a lot of people lately who wish to spread and water down the blame for our current economic predicament. Yes, the american consumer has a problem with too much spending and credit and not enough savings, but like one of my favorite right-wing-nut-jobs, Ross Douthat, says, there are hierarchies of blame:
So yes, the mistakes made at the top of the American economic and political pyramid might have been the same kind of mistakes made by people in the middle and the bottom, and might have been motivated by the same logic, and the same psychology. But they were made by people who had a far, far larger responsibility than the average American to be careful, and risk-averse and, dare one say it, wise … by people who, for the most part, came from the upper rungs of the meritocracy, with advantages arguably unparalleled in the history of the world … and thus by people whose risk-taking mistakes were worse than those made by the average homeowner or investor, because it should have been their business to be safer.
There is a pretty robust discussion about this over at the Atlantic Voices, involving liberal, libertarian and conservative writers.
Closed Circuit to Nagasaki: Do you feel better now?