If you look at the response to the Eurozone debt problems, or any other prior financial crisis, each time the politicians follow the same script:
1. Pretend there's no problem
2. When it becomes impossible to keep up the denials, start blaming the markets
3. Restrict free trading in the markets in some way (e.g. short sale ban)
4. When that doesn't work, start saying they won't need a bailout
5. Later on - go 'cap in hand' begging for a bailout
6. Get voted out of office in total disgrace and failure, becoming social pariahs and having their political reputation in tatters.
My question is, given that anyone who has studied economic crises knows that failure and disgrace is always the outcome of this standard politician's response, why do they follow the same script each time? Why not take a different course - like admitting there actually is a problem, stating what steps are necessary to fix it, and then carrying out those steps? Why not just take a no-nonsense honest & realistic approach, instead of sticking their heads in the sand like an ostrich and praying it will all just spontaneously disappear somehow?
Just look at ones from the past - 1997-98 Asia Crisis, 1992 ERM crisis, 2000-2002 Argentina & Brazil crisis, 1929-32 in the USA, 1973-74 in the UK etc. They all do the same thing and it works disastrously every time.
1. Pretend there's no problem
2. When it becomes impossible to keep up the denials, start blaming the markets
3. Restrict free trading in the markets in some way (e.g. short sale ban)
4. When that doesn't work, start saying they won't need a bailout
5. Later on - go 'cap in hand' begging for a bailout
6. Get voted out of office in total disgrace and failure, becoming social pariahs and having their political reputation in tatters.
My question is, given that anyone who has studied economic crises knows that failure and disgrace is always the outcome of this standard politician's response, why do they follow the same script each time? Why not take a different course - like admitting there actually is a problem, stating what steps are necessary to fix it, and then carrying out those steps? Why not just take a no-nonsense honest & realistic approach, instead of sticking their heads in the sand like an ostrich and praying it will all just spontaneously disappear somehow?
Just look at ones from the past - 1997-98 Asia Crisis, 1992 ERM crisis, 2000-2002 Argentina & Brazil crisis, 1929-32 in the USA, 1973-74 in the UK etc. They all do the same thing and it works disastrously every time.
