"Revenge of The Glut" is an Op-Ed piece in the N.Y. Times written by Paul Krugman. Krugman is a renowned Economics and International Affairs professor at Princeton University who won the Nobel Prize for Economics in 2008. I believe he is trying to reach out to the general public regarding our financial woes, since so many of us are dazed and confused by it all.
Krugman ponders the current state of our economy and offers some valid reasons as to how this mess started. I agree with his (and Fed Chief Ben Bernakes') assertion that the cracks in the world financial stage began in Asia in the late 90's. His points about the rise and fall of small European economies are valid also. The world markets are more connected than ever. While we are still the strongest market in the world, we certainly are not insulated from the effect of global fluctuations.
Mr. Krugman touches on our housing crisis and the sub prime mortgage fiasco, but fails to mention that it was the Clinton administration that forced banks to make bad loans via the Community Reinvestmment Act. The housing bubble was destined to burst, but politicians have kept in on life support for an inordinate amount of time.
In order for capitalism to work, bubbles must be allowed to burst and companies allowed to fail. Through the ashes, like the Phoneix, stronger and greater markets will emerge.
I was disappointed that Mr. Krugman did not offer any solutions to the worlds' financial woes. His opinions are highly respected and could shed some light into the darkness that is our economy.
