The Quiet Coup

This article is a must-read. When it comes to the banking and finance component of the current economic crisis, it seems one of the biggest dangers is the total lack of understanding by most people about what has happened, what is happening, and what could happen depending on which route out we take. I've been feeling very uneasy about the Summers and Geithner strategies thus far, and this article makes a compelling case for why we should all feel that way. The biggest danger is that even as the old system crashes down around us, we don't make the changes that are necessary to ensure it all just doesn't happen again. Simon Johnson, former chief economist of the IMF, in this piece lays out two potential paths forward. Neither is rosy, but at least one provides a chance to get out from under this disaster:

The conventional wisdom among the elite is still that the current slump “cannot be as bad as the Great Depression.” This view is wrong. What we face now could, in fact, be worse than the Great Depression—because the world is now so much more interconnected and because the banking sector is now so big. We face a synchronized downturn in almost all countries, a weakening of confidence among individuals and firms, and major problems for government finances. If our leadership wakes up to the potential consequences, we may yet see dramatic action on the banking system and a breaking of the old elite. Let us hope it is not then too late.