Lessons From The Crisis

One interesting thing about the global screw-up is that one sees how things work more clearly. One sees what clothes the various emperors are wearing, with the help of people in the know. Like former IMF chief economists.

The crash has laid bare many unpleasant truths about the United States. One of the most alarming, says a former chief economist of the International Monetary Fund, is that the finance industry has effectively captured our government—a state of affairs that more typically describes emerging markets, and is at the center of many emerging-market crises. If the IMF’s staff could speak freely about the U.S., it would tell us what it tells all countries in this situation: recovery will fail unless we break the financial oligarchy that is blocking essential reform. And if we are to prevent a true depression, we’re running out of time.

Oligarchy

When will the revolution happen here? Or has it already occurred and we don't even know about it?

The reality is that the worldwide economic meltdown and the bailout that followed were together a kind of revolution, a coup d'état. They cemented and formalized a political trend that has been snowballing for decades: the gradual takeover of the government by a small class of connected insiders, who used money to control elections, buy influence and systematically weaken financial regulations.

Link.

Cloning Mr Reddy. a.k.a. The West Knows Best!

From The Business Line:

For adhering to the general view more staunchly than was expected by a mere governor of a central bank, the Reserve Bank of India and its then Governor, Dr Y. V. Reddy, drew enormous flak. Such was the bad blood that was created — largely by hired guns — that even his deputy governor, Dr Rakesh Mohan, was not spared. In the end, the campaign came in the way of his becoming Governor.
He was, it is reliably learnt, seen as being a “Reddy clone”. Ironically, today, every central banker in the world is dying to be labelled a “Reddy clone.”

And these are relevant questions too:

Why is it that if India has an approach to something, Indian economists wait for it to be validated by the West before they accept it? Indeed, why do they attack the Indians who advocate that view before such validation is bestowed by the West? I genuinely believe that the Finance Ministry, which funded the Mistry report, and the Planning Commission, which funded the Raghuram Rajan report, have some serious explaining to do. As indeed do the economists who toed their line and kept up LeT like attacks on the RBI.

Could it be because we have our own share of maroons, blowhards, people with hidden agendas, and people talking their books? Or is it just that we believe the west knows best?