This post connects to two Keystone Economic Principles:
3. All choices have consequences.
4. Economic systems influence choices.
One aspect of the current recession has been the effort to compare it to past downturns. In that process, authors frequently focus on what is similar between this event and one or more past events.
Jerry Muller has an interesting insight in a recent post on The American website. Muller suggests that what may be most important is what is different about each major recession, rather than what is similar. For the current situation, he notes the differences in financial markets and financial institutions, and notes widely divergent contributing factors - innovation, regulation, incentives, and rating.
What I found most intriguing and at the same time obvious, was the idea that looking for similarities between events lends itself prescribing similar solutions. But the solutions need to be unique - based more in the culture and (in economic terms) the institutions inherent in the culture. The impetus for such solutions can come from government and the private sector.
And while both may be able to provide solutions that generate some level of confidence, something that is sorely needed at this time; my previous reading about economic institutions would indicate that for real change to take place, the economy will need to take time to evolve.
I'd be interested in your thoughts about the article.