Behind the subscription wall over at the FT the Greenspan has an opinion piece which at best reads as incoherent apologia and at worst as an attempted smoke screen covering his own responsibility for the run-up to the GFC. Given … Continue reading
If you are going to read one thing and just one thing on the financial crisis and how it is working itself out you need to read this blog post at naked capitalism: the one stop shop for understanding contemporary … Continue reading
Would be hard not to know by today that the S&P downgraded the US . What is less well known is why it is further evidence of the circus of greed that is the American financial and political system. First, … Continue reading
People who would want to avoid reading my dissertation or anything about neoliberalism but nonetheless would like to have some idea about what has been going on in the world of public policy and economic policy in particular ought to … Continue reading
Guest Post By Elleni Centime Zeleke Hot on the the heels of my last post on romance and because I am still high from celebrating international women’s day I want to add a few more discussion points to the topic … Continue reading
Krugman is sometimes a dull example of all that is both right and wrong with mainstream liberals in North America. Today Krugman auto deconstructs: Ideas Are Not The Same As Race I would get into the specifics of his post … Continue reading
I do not know nor have I read, nor do I have any friends who know or who have read Stephen Williamson. Apparently he graduated from Rochester. Who cares? What is sad about his post is that he gets almost everything wrong–to get everything wrong would be a triumph of sorts. No heterodox economists do not hate math. The most significant elements of the heterodox community have been both well versed in both math and linux (sadly). The Sraffians for example are a very math oriented bunch so much so that given the weight of their critique and mathematical proofs the lauded Samuelsonian school had to beat a hasty retreat into of all things hermeneutics to defend orthodox capital theory. Marxist economists have long been enamoured with math. You just do not get a calculation debate without math. Moreover all the new solutions to the so-called transformation problem have been fought out using math. Further the most recent high profile heterodox economist Steve Keen has been championing hard math for analysis of capitalist economies. Some might even say his reliance on hard math is the Achilles heal of his hard predictions.
There is no shortage of math on the so-called heterodox side of the economics profession there is, however, a shortage of insecurity masquerading as self-assured arrogance which truth be told is the real dividing line between the orthodox and the fringe.
PS. What a shameless display of disrespect to Douglas North who by the fringes’ account is one of the chief protagonists of neoclassical imperialism. Williamson does not even know who his own ideological generals are. But I guess that is what you get when you purge historical memory from orthodoxy.
To my mind the most interesting aspect of the health care debate south of the border is just how far off the actual legislation was from the rhetorical flourishes and hubris.
Paul Krugman thinks the fact that Markets Yawned is evidence of just how crazy those to the right of him are. What he misses of course is that the Yawn betrays just how little was really accomplished. Between the hyperbolic claims of Stalinistic socialism and the hubris of “Reform of the Century” what the actual legislation would seemingly indicate is just how impossible it is to get good coherent legislation drafted in the US. The markets yawned because they seem pretty convinced it is more or less business as usual in US health care.
The over the top rhetoric may produce good sound bites for the coming elections but they really do serve to mask the degree to which the US political system is almost completely captured by big, especially myopic and above all rich private interests. That all the political actors want to engage in theatrical spectacle is more than a little telling.
Stiglitz is one of the few (liberal) economists who is not suffering from a massive bought of cognitive dissonance owing to the GFC. This hour long interview with Joseph Stiglitz is well worth watching. Don’t have an hour? Then watch the first fifteen minutes.
I encourage people to read Matt’s full blog post. Below I have reproduced what I think to be the most insightful elements: or when Matt hits high dough. Particularly when he argues that the causes of the great financial crisis were in fact legally sanctioned fraud carried out under the watchful eye of a bought and paid for state. And that really is the truth that dare not speak its name.
Hedge fund managers were before congress justifying their pay packages and arguing against regulation while pointing the finger of blame at the ratings companies for the crisis; aka scam, aka market failure. So which is it? Everyone agrees that crisis surely fits the bill, but the characterization of the crisis as originating in a scam or a market failure of epic proportions is being ruled out of court.
Here is the dilemma: characterize the crisis as a scam and then people will have to go to jail. The problem is that if this be a scam it involves almost every single major player in the financial and political establishment in the US. In short, call it scam and a huge swath of the US ruling class would be on the hook.
However, if the crisis is characterized as a massive market failure (and massive is no mere hyperbole, perhaps understatement) then 30 years of patient theoretical innovation in the dismal science not to mention the ideological underwriting service it played for the institutional restructuring of the past thirty years will have to be re-thought.
What’s so ironic about this is that Brooks, in arguing against class warfare, and trying to present himself as someone who is above making class distinctions, is making an argument based entirely on the notion that there is an lower class and an upper class and that the one should go easy on the other because the best hope for collective prosperity is the rich creating wealth for all. This is the same Randian bullshit that we’ve been hearing from people like Brooks for ages and its entire premise is really revolting and insulting — this idea that the way society works is that the productive ” rich” feed the needy “poor,” and that any attempt by the latter to punish the former for “excesses” might inspire Atlas to Shrug his way out of town and leave the helpless poor on their own to starve.
That’s basically Brooks’s entire argument here. Yes, the rich and powerful do rig the game in their own favor, and yes, they are guilty of “excesses” — but fucking deal with it, if you want to eat.
And the really funny thing about Brooks’s take on populists… I mean, I’m a member of the same Yuppie upper class that Brooks belongs to. I can’t speak for the other “populists” that Brooks might be referring to, but in my case for sure, my attitude toward the likes of Lloyd Blankfein and Hank Paulson has nothing to do with class anger.
I don’t hate these guys because they’re rich and went to fancy private schools. Hell, I’m rich and went to a fancy private school. I look at these people as my cultural peers and what angers me about them is that, with many coming from backgrounds similar to mine, these guys chose to go into a life of crime and did so in a way that is going to fuck things up for everyone, rich and poor, for a generation.
Their decision to rig the markets for their own benefit is going to cause other countries to completely lose confidence in the American economy, it will impact the dollar, and ultimately will make all of us involuntary debtors to whichever state we end up having to borrow from to bail these crimes out.
And from my perspective, what makes these guys more compelling as a journalistic subject than, say, the individual homeowner who took on too much debt is a thing that has nothing to do with class, not directly, anyway. It’s that their “excesses” exist in a nexus of political and economic connections that makes them very difficult to police.
We have at least some way of dealing with the average guy who doesn’t pay his debts — in fact our government has shown remarkable efficiency in passing laws like the bankruptcy bill that attack that particular problem, and of course certain banks always have the option of not lending that money (and I won’t even get into the many different ways that the banks themselves bear responsibility for all the easy credit that was handed out in recent years).
But the kinds of things that went on at Goldman and other investment banks, in many cases there are not even laws on the books to deal with these things. In some cases what we’re talking about is the highly complicated merger of crime and policy, of stealing and government, which is both fascinating from a journalistic point of view and ought to be terrifying from the point of view of any citizen, rich or poor.