The high-profile international-business editor of the U.K. Telegraph, Ambrose Evans-Pritchard, shocked and pleased readers with an apology for his past support of the U.S. Federal Reserve System, its chairman, and its policies.
It was appropriate for Meredith Whitney to title her latest 600-page report for her investment clients The Tragedy of the Commons. That title was borrowed from an article written in 1968 by Garrett Hardin and published in Science magazine, illustrating the ultimate failure of people hoping to live off the incomes of others eternally.
When Zacks Equity Research announced on Monday the failure of two more banks in the current recession, the silence was deafening. The report blamed the usual suspects: “tumbling home prices, soaring loan defaults, and a high unemployment rate continue to take their toll on such institutions.”
Nobel prize-winning economist and Princeton Professor Paul Krugman provided the Associated Press with some unpleasant commentary on the huge debt that Americans and their institutions owe now. Krugman argues that eventually default on these loans is inevitable. That would mean bankruptcies for individuals and corporations and defaults by governments — or, if the Krugman approach is followed, this would mean calculated govenrment inflation of the money supply, which would make it easier to pay off debts.