The Bear Stearns bailout is prompting the chattering classes to ponder exactly what, if anything, should be done to fix structural issues in the financial system (or even if they do, in fact, exist). Paul Krugman, who’s been hammering away at deregulation, argues that the current financial mess is the fault of the erosion of oversight of our financial institutions. On “Fox News Sunday,” Glenn Hubbard (former Bush adviser) and Lawrence Summers (former Clinton cabinet member) duked it out from the right and left, respectively, while Newsweek spent its week asking everyone from Robert Rubin to General Motors’ Bob Lutz what to do about it all (a McCain advisor seems nervous: “Hopefully the stimulus package will help pick things up late in the second quarter or early in the third.”) Meanwhile, BusinessWeek is wondering if Hillary Clinton can spin political gold from the dross of the credit crunch.
On a more optimistic note, Charles Duhigg, writing in the New York Times this weekend, reassures everyone that there will be no second Great Depression. Or could it be that our economic system has become so complex that we’re going to be vulnerable to these crises for the foreseeable future?