This article reminds us the the Great Depression was avoidable. In 1931 a major bank in Austria failed. Central bankers in the US and France could have done something to prevent the problem in Austria from spreading throughout the world, but they did not see Austria's problem as their responsibility. The crisis in Austria spread throughout the global banking system and the global economy collapsed.
Today the most dangerous situation is in Spain. The Spanish banks are in danger of failing, and the Spanish government is too burdened with debt to rescue its banks. Leaders in the eurozone decided not to provide funds to the banks. Instead they loaned money to the Spanish government so that it can rescue its banks. Private investors decided that loading the heavily indebted Spanish government with addition debt made its bonds riskier. That has driven up the interest rates on the bonds that the government needs to sell as its bonds mature. It is not sustainable for any country to pay interest rates on its debt that exceed its growth rate. Spain has a negative growth rate and it is forced to turnover its debt at unaffordable interest rates.
A major difference between 1931 and 2012 is that we know more about depressions and how they can be contained. Unfortunately leaders in the US and in Europe do not appear to have the will do take the necessary actions to remedy the banking problems in Spain. We have a global economy, and an international banking system that is tightly connected. On the other hand, we have a political system of nation states that are constrained by national politics, and a narrow concept of national self interest that does not adequately recognize their vulnerability to a breakdown in the global system.
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