Follow this link to Charlie Rose’s interview with David Smick.
It sounds to me as if David Smick has some ideas on how this economic crisis differs from previous ones. He pays homage to those tactics that have helped us get out of previous economic crises. More importantly, he proposes new solutions for our new problems. He takes into account the growth in size of international private companies compared to the size of individual central banks and individual regulatory agencies from single countries.
I don’t think Charlie Rose grasped the significance of one of David Smick’s answers. Smick said that pumping in liquidity to Japanese banks during the lost economic decade in Japan did not encourage those banks to lend money. The interest rate on long term Japanese bonds made buying bonds a safer and more profitable enterprise than lending at short term rates that were near zero. Yes, the profit incentive in the free market still works.
I particular like the title of Smick’s book The World Is Curved, Hidden Dangers to the Global Economy. Thomas Friedman deserves that dig at his book title The World is Flat.