Interesting article but he seems to have missed the fact that...

Interesting article but he seems to have missed the fact that the credit crisis isn't just about consumer credit. That may have been the cause of it, but new productive capacity is now being held back by it. Clearly it needs to be fixed urgently and Obama is right to focus on it.

Take OZL as a case in point - a brand new, world class, low cost mine now facing potential shut-down as finance can't be extended. So now productive capacity will not only not grow, it will start to disappear thanks to the credit crisis.

Its interesting that Australia has managed to stay fairly unaffected despite a housing bubble longer and bigger than both the US and UK, and extreme levels of consumer credit. IMO this hasn't caused a collapse because real incomes have been rising to keep pace whereas in the US real incomes have been in decline except amongst the highest earners. Part of the cause of this would have to be the off-shoring of jobs (wage arbitrage), and the move to China of vast sections of the manufacturing industry. Obama is also right to focus on creating a more level playing field imo, and to encourage industry to remain in the US. Though this needs to stop short of protectionism, they do need to re-think their approach to globalization. There simply isn't enough jobs for everyone in the US to be managers of some remote facility in China and/or India.