Two people I read regularly and respect offered today totally opposite perspectives on Larry Summer’s FT column on the U.S. economy.
Paul Kedrosky said:
Larry Summers’ FT column on building a U.S. financial recovery is must reading. It is lucid, crisply argued and practically-minded in its attempt to come up with a plan to get U.S. policy ahead of the curve with respect to the unfolding multiple crises in the U.S. economy.
Felix Salmon said:
Larry Summers has a long and pompous article in the FT today on building a financial recovery. If you can slog your way through the awkward constructions ("consideration should be given to whether the government should establish a mechanism for purchasing assets from stressed banks in return for warrants or other consideration"), you’re likely to end up thinking that his diagnosis is pretty accurate, but that his proposed cure is far too vague to be useful.
Just goes to show that two smart, informed people can come down very differently on the same words, and that anyone seeking "expert" perspectives should engage more than one expert.
You’re the best Ben.
its just like the old mantra: trust, but verify.
It is nice to harness the power of collective wisdom. But there are some caveats too –
a) The level of divergence could be so vast that it could push resolution of issues to a corner; leading to indecision.
b) Matters calling for urgent attention and fixing may not allow the luxury of protracted debates.
c) Debates can be endless and not always economical. Delays in resolution can mire the problem into a deeper recess and that would make solutions overshoot budgets. Where larger public interst is involved, it could be catastrophic.
Why not open up the issues for debate early on, as they emerge and fix a timeline? Then put a decisive machiery in charge to digest and synthesize inputs (that come within the timeline) and factor them in while designing solutions.