A Crisis of Political Economy

The current state and the current banking sector require each other. They are so reciprocally intertwined that each is an extension of the other.

Remember this the next time somebody tells you, as New York Times columnist Bob Herbert did, that “free market madmen” caused the current financial crisis that is threatening to undermine the global economy. There is no free market. There is no “laissez-faire capitalism.” The government has been deeply involved in setting the parameters for market relations for eons; in fact, genuine “laissez-faire capitalism” has never existed. Yes, trade may have been less regulated in the nineteenth century, but not even the so-called Gilded Age featured “unfettered” markets.

Keynes v. Hayek

Former U.S. Rep. Dick Armey has an excellent op-ed contrasting the views of Hayek and Keynes in today’s Wall Street Journal. “Washington Could Use Less Keynes and More Hayek” is here. A sample: Hayek, who famously debated Keynes in a series of articles after the release of “General Theory,” gave what I believe to be [...]

TGIF: Inflation as Income Distribution

The Federal Reserve has been pumping hundreds of billions of newly created dollars into “the economy.” Much of that money has been sent to Wall Street to bailout large, struggling firms. But that’s just the beginning. President-elect Obama says that since he needs to “stimulate the economy” we can look forward to trillion-dollar budget deficits [...]