wretchard wrote:
“Overleveraging the financial system was neither Putin’s fault nor Musharraf’s. It’s a self-inflicted wound.”

One of the primary reasons the financial system was overlevered was a misalignment of incentives. In the short term, bankers make hay while they can, because that’s how they get paid. They don’t know what the future will bring, so they eat, drink and are merry for tomorrow they may die. There’s simply not enough incentive to focus on the long view.

Unfortunately the same is true of politics. Getting reelected is the short term incentive that drives a huge portion of political acts. So the only reason the long view matters to a short term focused politician is if the long view matters to the electorate. Hence, a host of bad decisions about how to prosecute the “real” global war on terror Wretchard so skillfully describes.