Monday, September 14, 2009

Debunking Bonuses, Irrationality And Capitalism As Causes Of The Economic Crisis

Jeffrey Friedman on the Causes Of The Crisis blog takes on "Three Myths about the Crisis: Bonuses, Irrationality, and Capitalism" on Monday, September 14, 2009.
With a year having passed since the start of the greatest economic crisis in our lifetimes, you’d think we would know a lot more now than we did then about what caused it. Yet by the spring of 2008, a three-part conventional wisdom about the crisis had taken hold that still governs mainstream thinking about what happened and why—even though there was never any evidence in favor of the conventional wisdom, and there is now much evidence against it.
Read the complete blog post here.

I would add that economists recognize that the oil price shocks of 2007-08 are a cause or at least a significant contributor to the recession and banking crisis. Yet, it is not part of the mainstream media discussion. See my April 26, 2009 post, "Did The 2007-08 Oil Price Shocks Cause The Current Recession?"

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