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Why Do Boom/Bust Cycles Get Too Big?

Posted by Sean | Posted under Economics, Ramblings | August 13, 2008

Answer: The Blame Game

At least that is the conclusion of JK Galbraith in his book on the big crash:

"The real choice was between an immediate and deliberately engineered collapse and a more serious disaster later on. Someone would certainly be blamed for the ultimate collapse when it came. There was no question whatever as to who would be blamed should the boom be deliberately deflated."
The Great Crash 1929

That sounds as applicable today as it was back then. And I suspect this will be applicable to several more boom/bust cycles during my lifetime. But back to the present situation. Does the fact that we even have to ask, "Who Killed The Economy?" mean that we are in deeper trouble than if we did not? And if that is the case, what does a 16-player tournament say as an economic indicator?


Cast your vote in the "tournament" to see the results.

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