Zakaria: Greed is Good
June 14, 2009
Fareed Zakaria takes a step back and looks at the crisis like noone else has yet I think. Spectacular article.
I love the name too: It reminds me of how my neighbor used to tease me and call me “Alex P. Keaton” because I would always say ‘greed is good’ (even though I’m a proud progressive).
I’m becoming quite a fan. His Sunday show is a must-see. Just check out his recent one with Michael Lewis to understand Wall Street culture, or the Lula DaSilva interview to understand how a leftist government can actually be good for business. I only wish it was one or two hours long and I would watch it throughout the week.
Here’s a passage from the article that shows great depth and historical perspective:
Each crisis convinced observers that it signaled the end of some new, dangerous feature of the economic landscape. But often that novelty accelerated in the years that followed. The 1987 crash was said to be the product of computer trading, which has, of course, expanded dramatically since then. The East Asian crisis was meant to end the happy talk about “emerging markets,” which are now at the center of world growth. The collapse of Long-Term Capital Management in 1998—which then–Treasury secretary Robert Rubin described as “the worst financial crisis in 50 years”—was meant to be the end of hedge funds, which then massively expanded. The technology bubble’s bursting in 2000 was supposed to put an end to the dreams of oddball Internet startups. Goodbye, Pets.com; hello, Twitter. Now we hear that this crisis is the end of derivatives. Let’s see. Robert Shiller, one of the few who predicted this crash almost exactly—and the dotcom bust as well—argues that in fact we need more derivatives to make markets more stable.