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The Financial Crisis in Perspective (Collection) by Mark Zandi, Satyajit Das, John Authers

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Chapter 23. Politics and Institutions

“Now, as through history, financial capacity and political perspicacity are inversely correlated.... So inaction will be advocated in the present even though it means deep trouble in the future. Here, at least equally with communism, lies the threat to capitalism. It is what causes men who know that things are going quite wrong to say that things are fundamentally sound.”

J.K Galbraith, from The Great Crash 1929, written in 1954

Confidence in political institutions is vital to markets, and usually taken for granted. Once lost, it is expensive to replace. When Congress voted down the TARP bailout plan and then the European Union showed itself incapable of coordinating a response to runs on European banks, ...

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