Every day we read the headlines, feel the tensions, observe the consequences of the recent failures of markets and government. Having a serious conversation about how to remedy these failures lies at the heart of current American politics. Among the questions that conversation should address are whether our response to the immediate crisis has been successful, and how might we restore an effective structure for corporate governance. The failures of corporate governance account for much of our economic troubles over the past 30 years. Getting out of the current mess will require addressing these underlying failures.

Regarding the question of whether government intervention related to the current crisis has been appropriate and effective, perhaps not surprisingly, my conclusion is that it has not. When our economic world appeared to collapse, there was absolutely no question that an enormous sum of money was going to be spent creating solvency and liquidity; money needed to be pushed into the system. On that premise, there was universal agreement. And when it was done — the number $24 trillion is thrown about when you aggregate the straight cash given out, the guarantees, the money we printed — everyone cheered.

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