PAUL SAMUELSON: Financial crisis work of ‘fiendish monsters.’
With the financial crisis that started in the United States triggering a global recession, a Japanese newspaper reporter interviewed distinguished American economist Paul Samuelson (pictured) for his insights on what the world can expect in the days and weeks ahead.
The 93-year-old Nobel Prize-winning economist and professor emeritus at MIT emphasizes the need for stepped-up and well-planned government spending to tide over the crisis, while lashing out at the deregulation policy pursued under what he calls “extreme right, supply side economics” adopted by former U.S. President Ronald Reagan and maintained by George W. Bush.
Q: You have experienced and studied the Great Depression. What is the difference between the Great Depression and the current financial crisis?
A: Well, the present one in America is still primarily a Wall Street phenomenon. But right behind that is going to be a Main Street downturn, because all of the swollen population, aged 50 to 65, have lost from these subprime ridiculous mortgages.
They’ve lost much of what they’re going to need to retire. And when I say “lost,” it’s not something that the government can stuff back in. It’s gone. And, it all traces to bad deregulation, to incompetent appointments, to conflict-of-interests appointments.
Harvey Pitt, the first head of the SEC for George W. Bush was a lawyer to the four big accounting firms. The four big accounting firms do not deal from an honest deck of cards. They have tricks to keep things off the balance sheet and so forth. And, these are the new fiendish Frankenstein monsters.