An outstanding summary of how world governments are failing to address key structural issues that are behind the unfolding economic malaise. More QE by itself is not the Holy Grail for future recovery but rather should be a component of a larger response on a number of fronts that current policies ignore for the most part, due to standing barriers of politics and general unwillingness to confront reality. As long as those in charge remain clueless in their reponse to problems facing global economies, holding and in fact beefing up your private Gold and Silver insurance makes more sense than ever.
ESL
http://www.washingtonpost.com/wp-dyn/content/article/2010/08/26/AR2010082605262.html
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Specific measures would include pro-growth tax reform, housing finance reform, increased infrastructure investments, greater support for education and research, job retraining programs, removal of outdated interstate competition barriers and stronger social safety nets.
That, of course, is what is desirable; how about what is likely?
With the recovery's visible loss in momentum, more people are coming to appreciate the importance of structural issues. Indeed, some elements of the package are visible. Yet, to my dismay, the prospects for a sufficiently bold policy reaction are doubtful. Post-financial crisis, it is no longer just about the "unusually uncertain" economic outlook and related challenges for a policy approach that remains too reactive and ad hoc. The politics of structural change are now a material impediment.
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This worrisome trio of increasingly ineffective national and global policy stances, intense political polarization and growing social pressures speaks to the risk that the economy's recent soft patch will evolve into something even more troublesome and sinister.
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