Just listened to an economist from the Kyiv School of Economics tell a large classroom the following (with a straight face):
– The U.S. stimulus was too small.
– Irrational behavior, what Keynes referred to as ‘animal spirits,’ was responsible for the recent economic crash. Bad mortgages are an example of such irrational behavior.
– Financial stability is a public good. [I’m not sure if this was a reference to bank bailouts.]
– The U.S. economy is under regulated.
– Classical capitalism is not capable of dealing with current challenges.
– Government needs to supervise the private sector to prevent excessive behavior and bubbles.
– U.S. needs to overcome culture of non-intervention and introduce new regulatory instruments. The Fed bailing out private companies is one such instruction.