Some readers might be turned-off by my insistence on identifying risks. But if we assume everything is alright and do not focus on the problems, we are acting out the same folly that fed the economic crisis. We engender moral hazard and have no incentive to fix the system.
I reiterate these concerns now because the IMF issued cautionary research and opinion last week in their Stability Report and World Economic Outlook, this week’s Economist led with “The Perils of Optimism” and looking around I see too many signs of doing things in the same old way.
Yes there are signs of improvement, even business growth in some sectors, but the fundamental economic framework is unchanged, the systemic problems are unchanged and the institutional solution has been bandaid, not cure. The same old thinking is displayed by leaders of industry and government – who have not been penalised or changed.
The Economist: The worst thing for the world economy would be to assume the worst is over.
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