It’s the spoilage that’s the problem

Yves Smith of Naked Capitalism wonders if the United States and Great Britain are too spoiled to implement the reforms needed to resolve the economic crisis. It goes without saying that one should look for America's bratty children mostly on Wall Street and in Washington:

If the US cannot stand to make risk capital like bondholders take a whack (heavens, no, we cannot make hapless funds take losses, better to dump it on taxpayers who have no ready way to complain), it goes without saying that we are wildly unprepared for any sort of real hardship. Yet as the experience of other financial crisis countries suggests, taking the hit from bankruptcies and resturcturings and cleaning up banking systems faster is associated with steeper initial downturns and rapid rebounds.

And if we don't take our medicine, I fear it will be imposed on us later by events regardless.

I suspect the United States will find it much more difficult than Great Britain when it events impose austerity measures on the local economy. The reason: The Messianic vision, the sense of entitlement and the wish for omnipotence, all of which contribute into making the core of America's political culture. America can only be the wealthiest, strongest and bestest country in the world. Denial thus suits Americans all too well, and they will have great need to practice this art in the future.

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