Umair Haque today does a pretty good job of terrifying anybody who pays attention to the economy — see “Market Correction? Try Perma-Crisis.” According to Haque, if those in charge don’t do something to restructure their dysfunctional institutions, we could be “on the Express Train to the Federation of Banana Republics.” In such case, he thinks “today’s market turmoil is probably just the pregame for the main event.”

Haque says that about the current economic crisis:

[I]t’s fundamentally grounded in the institutions we use to (mis)manage the economy. They’re deeply broken, and throwing money at broken institutions doesn’t fix them — it does the very opposite: it entrenches them, shores them up, fortifies them against the future.

He outlines six lessons on crisis that help explain why the situation is self-perpetuating, including:

When people who are prisoners of the paradigm that caused the crisis are in charge of fixing it, bet on … more crisis.

AB — 5 August 2011