Bubble, bubble, toil and trouble
Whoever designed my 1996 GCSE history syllabus was, in hindsight, inspired. One of the modules was on the Roaring Twenties in the US. We learned about jazz, flappers, prohibition and so on, but also about the causes of the Wall Street Crash of 1929. As far as I can remember, it was a mixture of laissez-faire government and excessive hire-purchase of lawnmowers that did for them. But the main thought I came away with was this: how could they be so stupid? Why didn't they see it coming? The inspired part came a bit later, in 2008. After years of economic hubris, we found out that we're not so very much more sophisticated than our predecessors after all. That's probably the most important lesson history can teach us (after "don't invade Russia"). So how could we be so stupid? Why didn't we see our crisis coming? The truth, now as then, is that some people did. They just weren't listened to. This time round Paul Krugman was one of those people. Back