In his recent Atlantic piece, Simon Johnson argued that the U.S. had succumb to the sort of financial crisis that typically plagues emerging economies like Russia. That analysis seemed a bit overheated to me--particularly Johnson's claim that the banks had perpetrated a "quiet coup" in Washington. Now the FT's Martin Wolf weighs in with a smart rejoinder:

Moreover, the belief that Wall Street needs to be preserved largely as it is now is mainly a consequence of fear. The view that large and complex financial institutions are too big to fail may be wrong. But it is easy to understand why intelligent policymakers shrink from testing it. At the same time, politicians fear a public backlash against large infusions of public capital. So, like Japan, the US is caught between the elite’s fear of bankruptcy and the public’s loathing of bail-outs. This is a more complex phenomenon than the “quiet coup” Prof Johnson describes.

Agreed. Beware the monocausal explanation in economies (and political systems) as complicated as ours.

--Noam Scheiber