Raghuram G. Rajan: Let Them Eat Credit

Posted by admin on Thursday, May 21, 2015

 

Professor of finance at Chicago’s Booth School and author of Fault Lines: How Hidden Fractures still Threaten the World Economy, Raghuram G. Rajan Money Quotation saying that political monetary policy allowing easy credit produced the economic crisis. Raghuram G. Rajan said:

 

 

“’Let them eat credit’ could well summarize the mantra of the political establishment in the go-go years before the crisis” — Raghuram G. Rajan

 

 

In this quote, Raghuram Rajan is criticizing the political establishment’s approach in the years leading up to the financial crisis. “Let them eat credit” references Marie Antoinette’s infamous quote about the poor in France, suggesting the poor had no bread to eat.

Similarly, Rajan is arguing that in the pre-crisis period, rather than addressing economic issues like stagnant wages, the political establishment essentially told people to solve their problems through easily available credit and debt.

So the quote criticizes the overreliance on debt and lack of other solutions as a “mantra” that contributed to the conditions that led to the crisis.