Trying to “fix” a recession is much like trying to fix a hangover after a drinking binge. However, while the cause and effect relationship between binge drinking and hangovers is well understood by everyone, few understand that a bust in the economy is caused by a previous boom that went too far. How can a booming economy be bad?
The best article I’ve read on this recession is old (2009), which makes it all the more impressive for best explaining our situation now. See WSJ Article.
One of the authors of the above article, Vernon Smith, also discusses the recession in a more current interview on reason.tv.