Cuasimonedas Times

Patacón

When will we issue Patacones?
Posted by: Economist.com |
NEW YORK Categories:Financial markets
YESTERDAY I wrote an email to an Argentine friend with my condolences.

“Sorry”, I wrote. “You no longer have a monopoly on undermining your financial markets, courtesy of economic populism.” (Though, to be fair, Venezuela has become quite adept at the practise.)

Many Americans continue to see this as a Wall Street problem. If the big banks fail then so be it, they say, but they do not understand how such failures will affect them. Concern centres on executive compensation, rather than on saving financial institutions.

To be fair, the media has done a terrible job, often neglecting to explain how and why this is not just a Wall Street problem. There are exceptions, of course. Willem Buiter explained yesterday exactly what a collapse of credit markets could mean for average Americans.

A little extreme, but not impossible—ask any Argentine.