Another resigned-in-tone guest column from Morgan Stanley's great Stephen Roach in yesterday's Financial Times. Somewhere along the way, he says, the message of The Bust has become mangled beyond comprehension:
This crisis was, first and foremost, about the unsustainability of macro imbalances – imbalances within and between nations – as well as about the egregious flaws in policies, regulatory structures, and risk-management practices that allowed these imbalances to take the world to the brink.
Recent policy initiatives offer little reassurance. Cash-for-clunkers in America and cash for roads in China are emblematic of a penchant for quick-fix stimulus actions that risk compounding existing imbalances.
US authorities cannot resist opting for another dose of excess consumption – despite the fact that the consumption share of real gross domestic product remains at a record high of 71 per cent.
Nor can the Chinese wean themselves off investment-led growth – even though the fixed investment share of their GDP appears to have surged beyond the already unprecedented reading of 45 per cent in mid-2009. Far from rebalancing, an unbalanced world once again appears to be compounding existing imbalances.
I had been wondering what this situation as described by Mr Roach reminded me of. Then it came to me: the poor facsimiles represented by any number of karaoked covers. Worse, the originals themselves often had few redeeming qualities.
Consider it the Mariah Carey Effect.