Larry Summers stirred a lot of interest with a talk he gave last week at an International Monetary Fund conference. The former Treasury secretary asked an unsettling question: What if the U.S. needs financial bubbles to maintain full employment?
Not for the first time, you might think, life imitates the Onion. The blog Zero Hedge notes that the satirical website got here first. “Recession-Plagued Nation Demands New Bubble to Invest In,” it reported in 2008. It quoted the chief financial officer of a “bubble-based investment firm”: What the U.S. needed was “a concrete way to create more imaginary wealth in the very immediate future. We are in a crisis, and that crisis demands an unviable short-term solution.”