Economic Policy in Crisis
Lawrence Summers gives an honest portrayal of the current American economic system--as it emerges from the economic crisis--stating that we “cannot rely on the self-equilibrating properties of markets, and markets become defined by vicious cycles”. We cannot police the market either, however. This becomes a tricky situation; therefore, as it is crucial that the interventions the government plays in our economy do not become permanent, because we should be as “minimally intrusive” as possible. He looks back on the past by stating, “experience teaches that once the crisis has passed, the will to reform will pass as well….if we are to bring about recovery, as rapidly as possible, the way in which we will bring about the recovery is through increased confidence” in the system. The job of economists, is therefore to minimally adjust policy to help facilitate a crisis, but also be able to reform the system in a way that will give the economy better confidence from the consumers for the future.
- Summers, Lawrence H. “Reflections on Economic Policy in a Time of Crisis.” Council of Foreign Relations, June 12, 2009. http://www.cfr.org/publication/19621/reflections_on_economic_policy_in_time_of_crisis.html.