Fault Lines
Written by Raghuram G. Rajan [more]

Author’s Note:  The theories outlined by this former IMF Fund Chief Economist and professor at UChicago are more than just the recaps of the Great Recession, though he believes in and describes the same causes as we’ve read before.  But more importantly, Rajan describes specifically how our bipolar US economy (Rich richer; Poor poorer) will hurt us in the long run.  I’ve long subscribed to that theory, I’ve just never seen it underpinned as well as Rajan does here. 

Excerpt:  “American overconsumption is driven by policies that were framed in reaction to growing public perceptions of inequality and insecurity, and these policies have contributed to financial-sector excess.  The remedies are not easy and will require further government intervention.  [But] given the propensity that government action to go wrong, we should approach interventions with care and some skepticism.  Yet inaction will make matters considerably worse.”