Keynes, Our Economic Times and a Liberal Education

The world-traveling alum strikes again with this find in Asia Times.  The article begins with a quote by Keynes, which should be enough to lure you in...

The power to become habituated to his surroundings is a marked characteristic of mankind. Very few of us realize with conviction the intensely unusual, unstable, complicated, unreliable, temporary nature of the economic organization by which Western Europe has lived for the last half century. We assume some of the most peculiar and temporary of our late advantages as natural, permanent, and to be depended on, and we lay our plans accordingly. On this sandy and false foundation we scheme for social improvement and dress our political platforms, pursue our animosities and particular ambitions ... [John Maynard Keynes, The Economic Consequences of the Peace], 1920

Keynes was a genius. Read the article and see what kind of shape we're in and what kind of thinking it's going to take to get us out.  GCS students, you'll be reading some of this.

When students graduate with an interest and some understanding of the world I feel a sense of pride and a renewed belief in the liberal eduation.

"Free Markets"

Joseph Stiglitz sayz:

"Fannie’s and Freddie’s free lunch, by Joseph Stiglitz, Commentary, Financial Times: ...The US government is about to embark on ... a partnership, in which the private sector takes the profits and the public sector bears the risk. The proposed bail-out of Fannie Mae and Freddie Mac entails the socialisation of risk – with all the long-term adverse implications for moral hazard – from an administration supposedly committed to free-market principles.
Defenders of the bail-out argue that these institutions are too big to be allowed to fail. If that is the case, the government had a responsibility to regulate them so that they would not fail. No insurance company would provide fire insurance without demanding adequate sprinklers; none would leave it to “self-regulation”. But that is what we have done with the financial system."
 [h/t economists view]

I heard some "left wing" talk show host yesterday on AM 1150 who kept going on and on about free markets and how if we just let them do their job everything would be ok.  Well, no.  Free markets, as an idea, may be perfect, but the truth is that they are a utopian concept, a shadow on the wall.  Power (as seen above) will always intervene, and, indeed, power structures (lobbyists, politicians, Wall Street) were present in the first place as Fannie Mae was massaged into a corporate model (with benefits for shareholders).  Until we have an open discussion about who is wielding this influence and whether such influence is undue and subject to corruption and failure, then our conversations will also remain in a "utopian" netherworld that fails to account for what is really happening.

Capitalism, the marketplace are incredibly dynamic systems, but they can be a threat to democracy when they become a corporatocracy.  It's funny, someboday was telling me how much China was becoming like us; I looked around and thought: "No, we're becoming like them."

Tag Cloud Poetry: Fed Reserve Helps Bear Stearns Buyout

motherf****** elite billionaires theft bailout crony capitalism
a**holes bear stearns class billionaires fed buyout collusion
jerks bear stearns profit federal reserve mutual help
employees bear stearns federal reserve collaboration
media public reponsibility fraud
corporatocracy