As the World Economic Forum begins its annual meeting, almost everyone is fretting about a possible U.S. recession and the dangers that poses for the world.
Recessions are natural events that purge excesses.
Most of Asia recently had a recession lesson that was extraordinarily painful partly because it was so long delayed. Interest rate cuts to prevent a precipitate collapse of demand may be justified, but a sustained period of minimal growth, especially of credit, is essential. Yet the pile of newspaper cuttings before me focus not on the excesses, not on reducing debts, not on improving corporate and household balance sheets. The imbalances, it is assumed, can be left to another day. But to ignore them is to store up even bigger problems a year or two from now.