Daily Archives: March 9, 2009

By Ricardo Caballero

We are running out of time. There is no end in sight unless much political capital is put at risk now. We have a superb team of economists and technicians, but their voices seem to have been lost.

I recall Lawrence Summers, chief White House economic adviser, rightly claiming that if markets over-react, the government has to over-react even more. US Treasury secretary Tim Geithner, even in his much criticised first announcement, sounded like a man of the right principles: We must stabilise the financial system, regardless of cost, was the message delivered with clenched teeth. Read more

Another ideological god has failed. The assumptions that ruled policy and politics over three decades suddenly look as outdated as revolutionary socialism.

“The nine most terrifying words in the English language are: ‘I’m from the government and I’m here to help.’” Thus quipped Ronald Reagan, hero of US conservatism. The remark seems ancient history now that governments are pouring trillions of dollars, euros and pounds into financial systems. Read more