Sunday, December 07, 2008

What went wrong?

Two views from an Australian perspective

Michael Stutchbury:

"The first great irony is that Australia's banking system has weathered the financial storm not because of, but in spite of, a regulatory framework set up in the '90s that aimed to generate more economic growth by increasing the economy's financial risk."

Carbon and Capital: Australia and the twin crises, Australian Literary Review, December 2, 2008

Ian Macfarlane:

"Has the current crisis invalidated the model of a deregulated financial system that has operated in recent decades? From an international perspective, it clearly has. Not only has the system proved to be unstable in itself, it has transmitted this instability to the wider economy and caused major collateral damage."

Australia and the international financial crisis, Lowy Lecture, Wednesday 3 December 2008.

And one on what to do:

George Megalogenis:

"The smart employer will hoard labour - through reduced hours or extended leave - with a view to redeploying once demand resumes. The dumb ones will only make any recession deeper than it need be because every dismissed worker drags down consumer spending with them."

Business's new mantra, The Australian, December 6, 2008