Global financial crises bring people and nations closer together

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In the news today …

… the WSJ joins the hey-look-at-how-Sweden-dealt-with-its-big-financial-crisis parade (which may well have begun right here on this blog):

As it happens, the U.S. already seems to be applying some of the key lessons from the Swedish crisis. The government-backed sale of investment bank Bear Stearns Cos. “was handled exactly as the Swedish crisis was,” says Anders Aslund, a Swedish economist at the Peterson Institute for International Economics in Washington.

… Alex Tabarrok argues that the fact that people all over the world have lost money on American subprime mortgages is a good thing:

The losses, of course, are regrettable and the desire to find and apportion blame for the crisis among investors, home buyers, mortgage brokers, credit analysts and regulators is understandable. We should and will learn lessons. And yet, despite problems with transparency one of those lessons ought to be that the crisis would have been worse if the losses had been more concentrated.

… and Alan Greenspan makes his latest and most detailed defense of his last years as Fed chairman on some London newspaper’s Website:

I am puzzled why the remarkably similar housing bubbles that emerged in more than two dozen countries between 2001 and 2006 are not seen to have a common cause. The dramatic fall in real long term interest rates statistically explains, and is the most likely major cause of, real estate capitalization rates that declined and converged across the globe. By 2006, long term interest rates for all developed and major developing economies declined to single digits, I believe for the first time ever.

Doubtless each individual housing bubble has its own idiosyncratic characteristics and some point to Fed monetary policy complicity in the US bubble. But the US bubble was close to median world experience and the evidence of monetary policy adding to the bubble is statistically very fragile. …

It’s just like Todd Rundgren once said (and has apparently been saying again lately):

One world
Whoa, its our world
Yeah, yeah, one world
Whoa, its our world
Yeah, yeah