The really bad news about the debt crisis is that it is sowing the seeds from which will bloom, if that is the right word, hundreds of doctoral dissertations five or so years hence. Economic model builders, unchastened by the fact that their predecessors' models failed to anticipate, indeed, contributed to the great crisis of 2008, will concoct elaborate equations designed to reveal whether it was the Fed's interest rate cuts, or its pumping of hundreds of billions into the credit markets, or the JPMorgan Chase-led takeover of Bear Stearns, or Hank Paulson doing whatever it is Treasury secretaries do in these circumstances, or the calming words of George W. Bush that brought the credit crunch to an end.
Given the political bent of most university economic departments, it is a safe bet that President Bush will be found to be on the cause-side of the balance sheet, not the cure-side.
Tuesday, March 25, 2008
Irwin M. Stelzer in the March 31st Weekly Standard: