I think one of the basic problems that the current crisis has revealed is that the set of instiutions we, the world, have, are not in any way commesurate with a global economy. Speaking as a historian in training, it's not an accident to me that the highest volume of world trade was 1929 right before the crash, a volume that only reached that level around the 90's and into the naughties.
You can see this in the failure of the euro for countries like Spain. Krugman gets closer to the truth when he says it's a catotrophic success, i.e. that the elites saw the euro as a wya to force greater european economic integration.
My take is darker than that, actually.
Global capitlism is proven to work very well for economic and financial elites, and not so well for trade unions, socialized government systems, etcetera. In short, I think the world's elites quite simply don't care. They don't, per se want to stick it to poor people, but they pursue policies engineered with their own self-intrests in mind, and if these policies happen to hurt people poorer than them, oh well.
To take it further, its utterly predictable that greater eocnomic integration with low levels of political integration would result in a situaiton where elites can take advantge of regulatory arbitrage. The very ineffectivness of our world governmental instituions is the veyr thing that makes it possible for them to be unaccountable. Nation states find themselves more or less helpless in the face of a global dilemma, and the various western democracries have proven that the power of the elites to make government effective and responsive to their needs ahead of and even at the expense of others has also proven itself. You see this is the German banking policy, in the fact that american programs whose primary benificires were corporations worked while programs whose primary benificiers were middle class individuals did not.
Add to this, in the american case, an amazing case of a populist right wing movement whose effective policy is to roll out the carpet for the corporate overlords they claim they are railing against.
It's really quite depressing.
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