Letters to the Editor
-
This is a joke, right?
Our current economic system is about as far from a free market as you can get without actually being socialist/communist. To suggest that our current problems would be solved with MORE government intervention can only be seen as a sick joke.
-
Keynes v. Friedman
It never made sense to me that Keynes could've fallen out of intellectual favor. Decades of human experience showed that Adam Smith's invisible hand worked no better in practice than communism at producing ideal social & economic conditions. Markets need to be overseen in order to maintain the necessary competition to produce efficient results.
Anyone who thinks we live in a totally free market is intellectually dishonest. Political corruption is rampant in this country and constantly skews incentives away from efficient market outcomes... toward whoever has their local (or national) politico on the payroll.
I see why Friedman would be so popular with the pro-business crowd. I don't see why policy makers should've ever agreed to loosen regulations.
-
Laissez Faire is a religion, not a social science
Greg Mankiw, W's chief economic advisor, is in many respects a Keynesian, along with most serious economists of any weight.
"Free Market Orthodoxy" is more of a religion than a social science. I'm paid to preach it every day as a high school economics teacher. I sometimes feel the need to take a shower after class.
-
more gov't regulation
Ronald:
Yes, paradoxically, when political corruption screws with market efficiency, I think the answer is more government.
Well, not necessarily more... but more transparent, and more professional. Regulatory agencies have to have teeth, and have to be independent enough to operate without political interference. I guess there's always the risk they go too far, but this is no excuse to take a completely hands off approach.
I think the current administration is FAR too political when it comes to allowing regulators (in every dept.) to do their jobs properly. Remember the neocon mantra "When we're done with the Federal Gov't, you'll be able to drown it in a bathtub." By failing to exercise proper oversight, these bums have allowed all sorts of negative externalities to creep back into the equation.
For example, lead paint in toys from China. Sure it's cheaper to have no oversight of toymakers. But who is measuring the cost to consumers of lead poisoning? Or the reduction in demand when people stop buying Chinese imports altogether because they have little faith the gov't is properly screening them?
Ignoring ALL the costs of an activity is just bad for business in the long run. I guess nobody thinks in the long run anymore...
-
he never went away, except among idiots and liars
well the liars always knew he was there they just didn't tell the idiots.
-
The golden rule, as usual
ronaldraygun has it half right, that today's economy sure isn't laissez-faire. But it sure ain't what he calls it either. It's regulate those who don't have the power to screw things up, don't regulate those who can screw it up, and when it gets screwed up, bail out those who screwed it up, because, as we all know, trickle down theory works fine for the ones at the top.
Remember the golden rule: those who have the gold make the rules. They can call it laissez-faire, Keynsian, free market, no matter, this economy has had many names in many languages in many countries and times.
-
Misunderstanding the Economics Debate
I agree with some of the earlier posters that not only is Keynes always already there when any discussion of macro-economics takes place, we have institutionalized his basic theories into our economic system, so whichever party may dominate in a particular time period, Keynesian economics is what they oversee, whether the are consciously aware of it or not.
Capitalism have proven to be the most effective economic model because it is so good at co-opting the best ideas of competing economic ideologies and subsuming them under the general rubric we still call capitalism.
There is no serious debate any longer between pure laissez- faire capitalism versus economic-totalitarian communism. The debate now, similar to the gun control issue, is simply: What is the optimum amount of regulation?
The latest banking/financial fiasco gives those favoring more regulation of that (and other) industries a nice, fresh supply of ammunition. The esoterica which the banking, lending and "investment banking" sectors (Wall Street) dreamed up to fuel the housing bubble were nothing short of brilliant when things were going well; and being "new," many of the activities were subject to minimal regulation and oversight.
When the worm turned, it was not only those who most benefited from "derivatives"--Wall St. investment banks--who would have to pay the price for the collapse of the very sophisticated pyramid scheme: it was--and is!--society as a whole. The damage, if not contained, will spill over the walls of The Street and impact citizens (in many countries) who could arguably be characterized as innocent bystanders.
The conclusion: There was an inadequate oversight/regulatory apparatus in place to protect the public from over-zealousness in one particular industry, an industry of such importance that the public weal has been put in jeopardy.
No serious person argues for ZERO gun control. And so too, no serious person argues for or believes in pure laissez- faire economics anymore.
It's about defining that optimum in regulation of guns and the economy that people disagree about.
-
Put away that Ray Gun, Ronald, and read your history
There is a huge difference between government involvement where government acts as a check, acts to level the playing field, and acts to protect the powerless; as opposed to where government is involved, in the pocket of the plutocrats and acting as their facilitator. The latter is what we have now. True socialism is of the former kind.
Anyway, we don't have to guess at what Keynesian economics would bring us. That's the neat thing about history: we can go back and see what happened and why. Every period of laissez-faire has ended in disastrous excesses. You can read all about it from Marx, Engels, Dickens and others. Further, a reasonable argument can be made that laissez-faire ultimately led to some of the greatest catastrophes of European history: the Great Depression, Fascism, and WWII. Keyneysianism was adopted at the end of WWII, championed by the likes of Chancelor Konrad Adenauer (no commie he) who understood that never again should things be allowed to get so bad that people seek salvation in the extremes (i.e. Communism and Fascism). The following two decades saw spectacular economic growth, which seemed to benefit all classes, not just the privileged, as under Friedmanism.