Given the inevitability of the bust we need to make more of the boom

Sir Willem Buiter in “Welcome to a world of diminished expectations” August 6, takes the role of a neutral and detached observer when he rightly acknowledges the unavoidable boom-bust cycles in the economies around the world and looks into the future for clues. That is good, but how much better would it not be if he had dared to make some recommendations on how to go about to make the most of the boom-bust cycle itself. I mean, when I have a hangover, much of the way I feel about it, has to do with whether the party was worth it or not.

At this moment we live in a world where financial regulators are only concerned with avoiding the bust, but is it not time for them to start thinking more in terms of helping to make the most out of the boom? The worst part of today’s headache with the financial system, is that the party seems not having been that good, except of course for some of the financial intermediaries who enjoyed it enormously.