SCOTT SIMON, host:
This is Weekend Edition from NPR News. I'm Scott Simon. This week the panic, the distress at the heart of the U.S. financial system began to move around the world. One by one, the world's richest nations have watched their shaky markets drop to the ground. Efforts to revive the ailing economies have brought little relief so far. And today, finance ministers from around the world are in Washington, D.C., searching for a cure.
President GEORGE W. BUSH: The leaders gathered in Washington this weekend are all working toward the same goals. We will stand together in addressing this threat to our prosperity. We will do what it takes to resolve this crisis, and the world's economy will emerge stronger as a result.
SIMON: President Bush speaking at the White House this morning. Clive Crook, who writes for The Financial Times, National Journal, and The Atlantic joins us in our studios. Clive, thanks for being with us.
Mr. CLIVE CROOK (Senior Editor, The Atlantic Monthly; Columnist, National Journal; Commentator, The Financial Times): Pleasure.
SIMON: The president, of course, gave a very short statement that didn't mention specifics. Do you see many specifics coming out of this meeting of the finance ministers?
Mr. CROOK: I certainly hope there are some. It's going to be very difficult for them to come up with an agreed point-by-point plan that can be implemented everywhere. But I hope that they manage to focus agreement around a set of, you know, key principles that they can all act on. If it's just the usual communique waffle, then we're in trouble. I think they've got to do better than that.
SIMON: Before the markets open on Monday.
Mr. CROOK: Right.
SIMON: And Sunday afternoon, I guess, in Asia.
Mr. CROOK: In Asia, yeah.
SIMON: Why hasn't anything worked so far?
Mr. CROOK: I think the markets are still trying to get their heads around the scale of this crisis. You know, everyone is very worried about the next domino to fall, what happens next. There's a complete crisis of confidence in the banking sector. The banks aren't willing to lend to each other. Nobody knows which institution is going to fail next. Something has to happen to break that kind of cycle of panic, and we haven't seen that yet.
SIMON: Secretary Paulson's announcement that the U.S. government is going to buy what amounts to an ownership stake in American banks. What's going to be the effect be on taxpayers? Is there an effect you can predict on the global economy?
Mr. CROOK: Well, on taxpayers it's bad news in the short run because taxpayers are going to have to pay to acquire these shares, you know, to recapitalize the banks. But I do think it's a good idea. I think it's necessary under the circumstances. And in the longer term, if you shape the rescue this way, there is an upside for taxpayers. You know, a couple of years down the road, five years down the road, taxpayers could come out ahead. So I think, you know, it's a question of short term versus long term.
Whether it will be enough to revive the markets and put the global economy back on the right track, I'm more skeptical. I think it's going to take time for this remedy to work, even once the markets begin to take it. We aren't even at that stage yet. I think we have to get ready for more bad news before the good news starts to come through.
SIMON: Can you give us a timetable?
(Soundbite of laughter)
Mr. CROOK: I wish I could. But I'm thinking when you look at previous huge financial crises, growth suffered for, you know, two to three years. And this is the mother of all financial crises. So I think, realistically, we could be looking at quite a long period of recession and maybe even a bad recession by historical standards in the U.S. I'm not talking about another Great Depression. I think that's hysterical. Things are not going to get that bad. But we'll have a bad recession. It could go on for a while. Three years from now, four years from now, I think it will be over. We'll be back on track. But we're going to have a very hard and somewhat prolonged period of damage control.
SIMON: Clive Crook, thanks very much for being with us.
Mr. CROOK: OK.