Politics bend it, bankers mend it

No matter what, it is now clear that the crisis was made possible by mismanaged US and European policies – in other words, bad politics. What has become clear since 2008, the year Lehman Brothers tanked, is that policy makers, both in the US, but most importantly in Europe, are very reluctant to do the right things in order “to get their economy back on track,” to quote Obama. Ironically, now central bankers are expected to lead the world out of economic bondage, and some are reveling in the task. But the central banker gang is far from monolithic. The US and China are flirting with a trade war which is looking increasingly inevitable. Europe faces tough decisions just as Jean-Claude Trichet steps down as President of the ECB and Mario Draghi, former Governor of the Bank of Italy, takes his place. What is clear is that central bankers now have the responsibility to pull the world out of the double-dip recession. Not an easy task.