When you think about the problem of the system, it’s certainly an economic crisis, and it’s also a political crisis, but you really can’t think about these as separate problems. These are problems that are intimately linked. The way I look at it, the political and the economic system are constantly interacting. In 2008, one segment of the economic system failed — that was the financial system, a subset of the economic system. In its failure you had both the financial problem but also the political problem that the financial elite lost all credibility. As a result of the failure of the financial elite, the political system came in to stabilize it and to preserve the system as a whole. And so you wound up with the political system coming in, the political elite coming in, and overwhelming the financial elite that had failed. In so doing, however, the political elite also lost a great deal of credibility. They lost credibility because they had, in responding to the financial crisis, seemingly destabilized the entire system by spending both far too much money and failing to basically discipline the financial system by holding those who did it responsible.
Now we can go into an infinite regress about why the financial system failed, and there are many who would argue that the failure of the financial system really was rooted in the political decisions that were made about the cost of money and so on. But these two systems are constantly interacting as are in some countries the military system and so on. And what we have seen here is a dramatic situation in which first the financial system and its elite lost credibility, and then the political system went into gridlock and the political elite lost credibility, until we have in all major countries of the world — the United States, China, the EU — until you have a general systemic problem. It’s not that it’s not soluble, in many of these countries, but you see it in a destabilization going on beneath the surface. In fact, the riots in London are kind of symptomatic of this, of the fact that some elements of society have lost such respect for the elites that they’re prepared to take extreme action.
The issue is: who are these people who are running things, what gives them the right to do so, and if that right does not somehow flow from competence, what does it flow from? So we have a crisis I think, not in corruption, but of sheer incompetence and indifference to incompetence, and that is something that is not necessarily unmanageable, but it’s certainly not a question of getting better regulations.