Greece and the 10th anniversary of the global financial crisis

We are at the 10th anniversary of the global financial crisis that laid ruin to the Greek economy. The overriding lesson of the global crisis is the persistently weak governance of the global financial system. I count six basic blunders that cost the world trillions of dollars in lost output and years of anguish. Unfortunately, among the worst blunders has been the handling of the Greek crisis, including the recent empty declarations that the crisis is over. If only life were as easy as the fantasies of the politicians and of European Union bureaucrats who routinely checked the boxes.

Blunder 1. Excessive liquidity and financial deregulation (pre-2008). At the core of the 2008 financial crisis was a major expansion of credit that greatly outpaced the real economy during the years 2001-2007. With Wall Street's political power ascendant in the Clinton...