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Wednesday, February 27, 2013

Stephen Roach — America’s Strategy Vacuum

As the quintessential laissez-faire system, the US outsources strategy to the invisible hand of the market, with the government locked into a reactive approach to unexpected problems. Thus, both monetary and fiscal policy have been focused on cleaning up after a crisis rather than on how to avoid another one.
Project Syndicate
America’s Strategy Vacuum
Stephen S. Roach | formerly Chairman of Morgan Stanley Asia and the firm's Chief Economist, and currently a senior fellow at Yale University’s Jackson Institute of Global Affairs and a senior lecturer at Yale’s School of Management


2 comments:

  1. As the quintessential laissez-faire system, the US outsources strategy to the invisible hand of the market, with the government locked into a reactive approach to unexpected problems. Thus, both monetary and fiscal policy have been focused on cleaning up after a crisis rather than on how to avoid another one

    I don't know if its "laissez-faire" when the clear policy after the ship hits the iceberg is "lifeboats for the rich and well-connected only." It seems that we have a rather pro-active policy to make sure that the well off suffer no inconvenience regardless of whether this leads to another crisis or not. I suppose, though, that is what is meant nowadays by "let the market decide."

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  2. David, I assume that this is what Roach means when he says that govt is locked into a reactive position...focused on cleaning up after a crisis."

    It's laissez-faire with moral hazard.

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