Before the Republicans bully the Democrats into scrapping the idea of a second stimulus, maybe people ought to listen to economists instead of Wall Street. Yesterday Wall Street rallied on some good news but they may be getting ahead of themselves. There are definitely good signs out there though there's little to suggest it's here to stay for any length of time.
But Simon Johnson, an economist at MIT's Sloan School of Business, said that by propping up the financial sector, government efforts to date are only delaying another inevitable crash.
By giving large financial institutions the assurance that they are too big to fail, and thereby offering an implicit guarantee to excess risk-taking, the administrations of Presidents George W. Bush and Barack Obama have made the problem worse.
"The crisis is just beginning," Johnson said. "Have bankers won? In the short-term, absolutely. The immediate opportunity for change has already been missed."
