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Brad DeLong sounds the alarm
Sunday, March 23, 2008
Apparently we are now quickly moving out of Phase II of the current financial crisis, headlong into Phase III, and Brad Delong is sounding the alarm.
Some interesting comments over there too - Grasping Reality with Both Hands and all.
2 comments:
Maybe the problems are too much regulation and too many bail outs, as well a concentration in the finance industry that allows market manipulations. I suspect this whole crisis is a creation intended to give the Fed more powers over the investment banks and brokers and allow the big boys to get bigger.
Step aside, let banks and investment companies do what they will. No bail outs. Enforce laws on the books against fraud, throw some CEO's in jail. Dump the Fed.
Let each state regulate state banks. Let the federal government issue it's own money debt free, and let them regulate and loan money to the national banks, and earn interest, and spend what they need without income taxes or debt. That will stimulate the economy. Inflation is due to interest and taxes, not money creation spent on productive economy where there is adequate capacity to preduce and adequate demand to consume.
The only debt should be to fund current account deficits and service our existing foreign debt obligations. Domestic debt can be paid off with governments own money.
Pop the credit market debt bubble.
Problem solved, except going against the bankers got Lincoln, McKinley and JFK killed.
What are the odds that the central government will (a) diagnose the problem correctly, and (b) take action that will actually solve the problem? Delong appears to believe that the central government is infallible. History teaches us otherwise.
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