A Question of Consumers

"But the conservatives had their revenge. What the Republicans under Reagan did was to suddenly announce that government was bad, and the less you had of it, the better. Reagan undid a whole, vast field of regulations on security marketing, resurrecting the doctrine of Mellon and the 1920s Republicans, that the market was self -regulating, that businessmen were too sensible to be subject to greed. Reagan even brought back to life Mellon’s tax cuts for the rich." Richard Sale

Download a_conversation_with_richard_parker.doc

Comments

[Will]

That was good reading.

NYT columnist and Nobel Prize winner Krugman has a good column titled Franklin Delano Obama. He aruges that FDR really blew it and wasn't audacious enough. Maybe that's why he engineered Pearl Harbor w/ his ultimatum! The salient part follows:

"
Well, it wasn’t as major as you might think. The effects of federal public works spending were largely offset by other factors, notably a large tax increase, enacted by Herbert Hoover, whose full effects weren’t felt until his successor took office. Also, expansionary policy at the federal level was undercut by spending cuts and tax increases at the state and local level.

And F.D.R. wasn’t just reluctant to pursue an all-out fiscal expansion — he was eager to return to conservative budget principles. That eagerness almost destroyed his legacy. After winning a smashing election victory in 1936, the Roosevelt administration cut spending and raised taxes, precipitating an economic relapse that drove the unemployment rate back into double digits and led to a major defeat in the 1938 midterm elections.

What saved the economy, and the New Deal, was the enormous public works project known as World War II, which finally provided a fiscal stimulus adequate to the economy’s needs.

This history offers important lessons for the incoming administration.

The political lesson is that economic missteps can quickly undermine an electoral mandate. Democrats won big last week — but they won even bigger in 1936, only to see their gains evaporate after the recession of 1937-38. Americans don’t expect instant economic results from the incoming administration, but they do expect results, and Democrats’ euphoria will be short-lived if they don’t deliver an economic recovery.

The economic lesson is the importance of doing enough. F.D.R. thought he was being prudent by reining in his spending plans; in reality, he was taking big risks with the economy and with his legacy. My advice to the Obama people is to figure out how much help they think the economy needs, then add 50 percent. It’s much better, in a depressed economy, to err on the side of too much stimulus than on the side of too little.
"

[William R. Cumming]

I understand that several skilled investigative reporters and researchers are already under contract to document who the brightest boys in the room were this time. My guess is that the last 30 years will yield more than enough of a witch hunt and blame game before we are through with this economic catastrophe. Note the lack of transparency so far so that almost impossible to judge what confluence of events, data, knowledge and hopefully skill and competence are being mustered to deal with the situation. Between now and the end of the year hedge fund redemptions will roil markets. In the meantime Congress needs to grant very broad authority, e.g. the Economic Stabilization Act of 1970 which Nixon used to deal with the hyper inflation and economic turmoil of the "guns and butter" syndrome. Went off the gold standard, wage price and rent freeze, floating exchange rates, and other incentives to speculation but really not understood at the time. I would start with Nixon to deal with the history of this crisis and yes it is a crisis. Depression and deflation may be the least of the problems. A very very unstable political situation in my opinion. I am glad we don't have to wait until March for a new President and administration but crouching down in Chicago is not giving me confidence in OBAMA and I voted for him. A lot of damage can be done in the next 68 days by Bush, and his minions. And of course this is the most severe financial crisis since paper money and books have been lost to the virtual world of bytes and bits. WOW! What an opportunity for GREED to will out.

[Cieran]

Timothy, Chapter 6, Book 1:

We brought nothing into the world, and we can take nothing out of it; but as long as we have food and clothing, we shall be content with that.

People who long to be rich are a prey to trial; they get trapped into all sorts of foolish and harmful ambitions which plunge people into ruin and destruction.

The love of money is the root of all evils and there are some who, pursuing it, have wandered away from the faith and so given their souls any number of fatal wounds.

[Watcher]

This where Reagan's (and follow on administrations) philosophy of smaller government has failed us. One could easily argue that by the time Reagan entered into office we were starting the current wave of globalization we are in today. When looking at globalization and the role of governments, government has the implicit role of both encouraging the conditions that allow the country to reap the economic benefits of globalization but to also put in place the safeguards that protect the population from the negative effects of businesses that focus solely on profit above all else. In that regard, we have failed. As a result we have now generated a population that sees how much they are putting into the system and getting so little out while those on top are fat and happy. And the republicans wonder where they went wrong...

[Leila Abu-Saba]

How many readers listened to Public Radio's Market Watch today (Nov. 13) in which Anne Pettifor described how Nixon undid Bretton Woods, leading to this crisis (in her view).

She wrote this book:

http://www.amazon.co.uk/Coming-First-World-Debt-Crisis/dp/0230007848

I am not qualified to criticize her history and analysis, but it sure made a good story. The laywoman's summary:

Bretton Woods during WWII (including Keynes and FDR) laid out a framework for countries to deal with their indebtedness, in order to prevent crashes like that of 1929. for X years until 1971, all the countries party to Bretton Woods agreed to restructure their economies if they got into too much debt. And somehow they were using gold to do this. But in the late 60s and early 70s America began racking up big debt due to Vietnam. Nixon decided to quit abiding by Bretton Woods; quit using gold to settle accounts; start using US Treasury bills. This meant that we could just print money I guess.

Add to that the way banks began lending money to consumers on looser and looser terms, and Pettifor says we got a double whammy.

THat's just my very crude, remembered summary from the radio show, heard while I was driving myself in SF. You can listen to the show here:

http://marketplace.publicradio.org/display/web/2008/11/13/pettifor/

I'd be interested in Col Lang's take, especially since Pettifor was a driving force behind Jubilee 2000. Wondering if our host has an opinion on her current analysis and the concept of debt forgiveness behind Jubilee 2000.

[Patrick Lang]

Leila

I think that the present crisis results from an estrangement between the worlds of finance and economics.

Given the chance to do so, the clever progressively detached risk from opportunity and turned banking and related activity into a confidence game.

My educational deformation leads me to say that the guilty in this matter are and were without virtue.

They are merely wealthy. pl

[Will]

interesting that Prof Parker teaches at Carnegie-Mellon U.

the wiki leaves one w/ the impression that Mellon is remembered economically for two things:

1) lowering the progressive tax rates on the wealthies from 78% to no more than 25%. That seems to have worked out rather well.

2) contracting credit and trying to weed out the weaker banks at a time of trouble. Now that was disastrous and anti-Kensyian. What was needed was more money supply not less.

Now the lower marginal tax rate is the idea that Reagan picked up on. I remember the adherents using the quote from Ibn-Khaldun

"
In the early stages of the state, taxes are light in their incidence, but fetch in a large revenue...As time passes and kings succeed each other, they lose their tribal habits in favor of more civilized ones. Their needs and exigencies grow...owing to the luxury in which they have been brought up. Hence they impose fresh taxes on their subjects...[and] sharply raise the rate of old taxes to increase their yield...But the effects on business of this rise in taxation make themselves felt. For business men are soon discouraged by the comparison of their profits with the burden of their taxes...Consequently production falls off, and with it the yield of taxation.

wikiquote "" * This sociological theory includes the concept known in economics as the Khaldun-Laffer Curve (the relationship between tax rates and tax revenue follows an inverted U shape)."

[Leila Abu-Saba]

OK that's a general description of the guilty. Wondering if you credit Pettifor's accusation that deconstructing Bretton Woods made it possible for the clever and the guilty to do this. (this question may be rephrasing her point incorrectly).

[Patrick Lang]

Leila

I can see that the Bretton Woods regime created a stable financial system that made it much more difficult for those without conscience to speculate in ways that were conducive to creating false value. That would make the answer to your question be "yes." pl

[TR Stone]

My problem with the most recent governing political philosophy (1980-2008) was that you could cut taxes and continue with the necessary services at their existing levels.
Look around you at the roads you are driving on, or the people you deal with behind the cash registers(terminals),--taxes pay for the "tangibles" (infrastructure, education, etc.).
That "please elect us" agrument was based on the message that there are our fellow Americans who are gaming the system so we can not be successful.
Unfortunately, they did not specify that those Americans were the "haves"!

[TomB]

This Sale/Parker argument hinting that conservatives/ Republicans/Reagan were really responsible for what's going on now reminds me of why the law focuses on something called "proximate cause" rather than "cause" in general or some other formulation.

If for instance you simply and generally say that "whoever caused this crash is liable" you get into insanities, because one can then argue that "oh, if person X involved in the crash had only left their house five minutes later that intersection crash with person Y would never have occurred." Indeed you can say that if either person X or Y were born five minutes later or earlier the crash would not have happened and thus it's the fault of their mothers. Or their grandmothers, or etc., etc. Thus the law talks about "proximate cause" instead.

But what Sale/Parker suggest is to go back with something like one of those infinite regressions and, ta-da, amazingly land blame on conservatives they don't like and I'd bet they never liked. Gee, how surprising. As the Church Lady would say, "How conVENient."

Seems to me there's heaps and heaps of far clearer and far more proximate cause here that's gradually coming into focus and that both parties are responsible for. The late '90's repeal of the Glass-Steagal Act, Greenspan's (admitted) refusal to go along with some regulations in the late 1990's, these "credit default swap" mechanisms, the government's insane degree of not only facilitating sub-prime mortgages via allowing Fannie Mae and Freddie Mac to buy 'em but then also things like the Community Reinvestment Act strong-arming banks and etc. to make such loans, and etc., etc. And certainly as Lang hints there's just the psychological zeitgeist of greed that took over on Wall Street for the last twenty years or so.

I don't know if any regulations or laws will ever be sufficient to guarantee what's happened will never happen again. But one thing that's clear to me is that we'll never really get such regulations and laws and etc. if instead of looking at what's happened in a cool analytical way we turn it into some hack partisan opportunity to make political hay and advance political agendas. Back at the start of the Great Depression that of course is exactly what the Democrats tried to do blaming Hoover and the Republicans. ... Until of course it turned out that *they* couldn't solve it either. (And indeed had almost certainly played their part in starting it too such as with the Smoot-Hawley tariffs.)

Haven't we had enough recent experience making complex decisions and diagnoses not via cool analysis (is Saddam really a threat to us even if he *does* have some few big weapons of mass destruction?), but instead on whooped up political polemics?

At the very least with all these snap, oh-so-knowing post-hoc analysts someone ought to ask 'em why if they knew it all along how come they didn't predict it in some detail? As far as I know that Roubini guy (sic?) is about the only one who can lay claim to that, not this Parker fellow. So if it's all so clear to him now, how come he wasn't screaming warnings about it before? And how come Sale didn't even *ask* him why he didn't?

Moreover, the whole thesis of the article can sound so foolish it makes it seem like some caricature of tortured tendentiousness. After all the entire basis of the piece lays the blame on ... a supposed lack of consumer purchasing. But for the love of God doesn't it seem that the genesis of this problem is consumers (and others) purchasing *too much*? Buying houses they can't afford, carrying too much credit to live beyond their means? Are Sale and Parker *really* meaning to say that somehow but for conservatives/Republicans/Reagan a person earning $50,000 per year *would* be able to afford a $500,000 house? And how does the lack of consumer purchasing power explain mortgage lenders *making* such loans in the first place?

Yeesh.

Cheers,

[Matthew]

John Kenneth Galbraith said we have these collapses every 30 years because that is the limit of collctive memory.

My prediction: In 8 years another Republican will run on the "cut taxes" platform and the deficits will explode--again.

Their snakeoil always makes a comeback.

[Fred]

I believe a key quote from the article is “. What the situation required was higher wages to allow an increase in consumer buying power – for those goods.”
Conservatives have been waging war on high wages for years. The less they pay, the more they make – in the short term. Combine that with finally achieving Grover Norquist’s goal: drowning government in a bathtub (of debt). Are congratulations in order?

[Will]

purchasing power, marginal tax rates- it all comes down to money supply and marginal tax rates.

too much money supply then inflation. too little then deflation. forget gold. Why tie a nation's well being to the capriciousness of discovery of a metal in the ground?

the marginal tax rate? In Reagan's mind, it was intuitive. During World War II while James Stewart was actually in the Army Air Corps on bombers, Reagan was making films and apparently getting taxed at the rate of 90%, ouch!

Current research points to a rate of about 60% or so at where people feel, screw it, I ain't working for the goverment'ssake.

[bstr]

Dear Sir, you have indicated that those responsible were without virtue, merely wealthy. If we assume for a moment that prudence is a primary virtue to be associated with aquistions then responsibility must extend to the (un) wealthy. I do not think you will find many who do not feature property ownership, and property in the form of a family home in particular, as a major part of the "American Dream." There seems to be some virtue, perhaps charity, in extending howme ownership to a part of the (un)wealthy. But that being done is there not an increased need for prudence on the part of those now able to purchase a home?

[johnf]

Ann Pettifor's website is:

http://debtonation.org/

There's an excellent discussion in which Pettifor features on:

http://debtonation.org/2008/11/predicting-the-crash/

why the media by and large missed the oncoming Crash. Also featured is Gillian Tett of the FT who also called the Crash. But she didn't train as an economist but as an anthropologist, and when first joining the FT she decided to look at the City (of London) in the same way an anthropologist would look at a Papua New Guinea tribe. And in doing this, apparently, anthropolists are trained to look for social silences - the things which aren't discussed - as much as the social noises. So she looked not at the glamour end of the City - equities, financial markets - but at the nine tenths of the City no one ever notices - all the unofficial banking and leveraging markets. The dark and enormous continent. At first she worked out of a broom closet at the FT, but has since gone up.

Also well worth reading IMHO on people who caught onto all this crap before it happened are the guys in Michael Lewis's article:

http://debtonation.org/2008/11/predicting-the-crash/

[Andy]

Excellent comment, TomB, I agree with it.

The most vexing part of this entire mess is how the problem is wrongly framed in either-or terms of "regulation" vs "deregulation." All markets, by definition, have some amount of regulation - the problem, it seems to me, is not so much one of how much (as in the amount) of regulation; it's about the content and character of regulation. One can look at almost any industry and find bad regulations and the mortgage crisis is no different. For example, regulations that sought to increase home ownership by lowering lending standards had the effect of increasing the number of risky loans and was a major factor leading to the demise of Freddie and Fannie. In the case of Freddie and Fannie the problem was really too little regulatory oversight (which is quite different from too little regulation) in some areas and plainly bad regulation in others. Cutting out the bad regulation is a good thing, even though doing so might amount to "deregulation."

The irony is that those who supported the regulations lowering lending standards are some of the same who are singing about the evils of deregulation and the GoP. Sorry, but one can't have it both ways.

So the way I see it is (simplistically) that both the Dems and GoP were busy appeasing particular demographics and ideological itches by changing regulations to benefit their various interest groups. It was the combination of both that caused this mess, not some vague notion called "deregulation."

What we really need is the minimum amount of regulation necessary to ensure transparency (so that people can make informed decisions) and market stability over the long term. We need the resources to enforce those regulations. We also need to minimize "social engineering" regulation as much as possible - regulation that attempts to create outcomes for particular demographic groups. I realize this is a hopeless desire given the venality of Congress (just look at the tax code), but we should strive for it nonetheless. We shouldn't be forcing or incentivizing lenders to make risky loans to benefit some and we shouldn't allow speculators to exploit loopholes and transfer and hide risk while reaping the profit at someone else's expense. Such social engineering-type regulation tends to result in many unintended and unforeseen negative consequences down the road. When we do engage in such regulatory practices, we need to build in mechanisms to guard against negative second and third order effects. Otherwise, we'll be down this road again in another few decades.

Finally, unless we ignore much of the partisan politic polemic that passes for analysis on this and other topics - polemic that seems more interested in fixing the blame rather than fixing the problem - we are going to make poor regulatory decisions that will come home to roost. Analyses that, as TomB puts it, lay all the blame at the feet of one's political opponents is awfully convenient for advancing political agendas, but creates less understanding of the problem impeding our ability to forge a cogent path forward.

[Cieran]

There is an undercurrent of belief present here (and in the larger media sphere) that this crisis is something readily solvable with the tools at hand. Maybe it'll take some time to repair, maybe not. Few seem to recognize the full extent of the threat involved.

The simple truth is that this is an existential crisis, and it has a substantial likelihood of being much worse than the Great Depression. And those who practice the "a pox on both political houses" arguments miss perhaps the most fundamental point of our current electoral picture, namely that both parties are indeed heavily invested in the redistribution of wealth and of its attendant risk: their differences lie primarily in direction.

The GOP has demonstrated that it is the party that advocates redistribution of wealth up the financial ladder, and redistribution of risk down it. Thus blue- and white-collar working class citizens are now responsible for bailing out those plutocrats who were happy to take the money and run when markets permitted them to, but who now want to socialize the downside risks when they can no longer make a fast buck via their financial shenanighans.

Democrats tend towards the opposite persuasion, of redistributing wealth downwards and redistributing risk up the financial ladder towards those who can most afford it. That belief is based on the simple notion that working-class people are not the cause of this problem (not even in the subprime sector... because that's why it's called "subprime"!), so they shouldn't be forced to clean up the mess for any parties they were not invited to attend.

In years past, this approach was known as "accountability". It's still a remarkably good idea.

Only one of these competing philosophies has a prayer of working successfully in the real world. Only one of them bears any resemblance to the laws of economics, or for that matter, to the laws of this nation. The electorate has apparently figured this difference out, and here's hoping our political leaders can come to understand it, too.

[mlaw230]

Interesting stuff, it appears that we have forgotten how to run an empire.

As a colony we were forbidden by the crown to make steel/iron tools, India similarly could export cotton (replacing the south)but had to leave the textile industry to England. As an empire one can privatize the profits and socialize the costs, but one has to look after your working people on some level.

Our elites have revolted, they no longer feel any burden to employ their countrymen or to pay a living wage. They will move across the globe to reduce labor costs without even increasing hourly productivity. Their allegiance is to their own "class." The elite of Manhattan have more affinity with the rich of Dubai than they do with the line worker in Detroit.

America and Americans have maxed out their credit cards, literally and figuratively. There will be no increase in wages just a slow dissolve as more work goes off shore, and as the auto industry dies the last bastion of unionized labor dies with it.

In short, whilst most Americans have been discouraged from thinking in terms of class, and those that do are painted with the scarlet "S" word, the truly wealthy corporatists have quietly stolen a march and now dictate terms to governments large and small.

There is solace only in knowing that this is not sustainable.

[Sidney O. Smith III]

Perhaps this economic crisis will settle the debate between the Keynesians and the Austrians as to the cause of the Great Depression.

Admittedly, I grew up in the FDR tradition but the work of Ludwig Von Mises is absolutely fascinating and, in my view, should not be dismissed with prejudice. And while I am more partial to the work of Hayek and Von Mises, Murray Rothbard’s work is breathtakingly brilliant and certainly presents a qualified opposing argument to the big government Keynesian approach.

So I say let the debate begin in earnest. Ron Paul vs. the Keynesians, I suppose.

As an example of extreme irony, people refer to Reagan as Mr. Small Government but one visit to the Reagan Building in DC, presumably a government project to memorialize his tradition, and I beg to differ. Looks like an example of wretched excess at taxpayer expense (although a good venue for the performing satire group Capitol Steps). Not saying the Reagan building is the man’s fault but here’s Wiki: "At the time it was built, the Ronald Reagan Building was the most expensive federal building ever constructed, at a cost of $768 million. As a federal office building, it is second in size only to the Pentagon…"

And the beat goes on…

[Jim V]

At other blogs where this issue has been debated, I have seen comments alleging that the additional loans granted due to the Community Restoration Act were not a significant cause of the Fannie Mae problem, because they were a small part of Fannie Mae's portfolio (less than 5%), and in fact defaulted at less than the average rate. I don't have the data to confirm or refute this myself, but would ask those who blame the CRA to present their data.

The CRA may have been a bad idea in any case, or not, but it should be assessed on a factual, not ideological basis.

[TomB]

Andy wrote:

"the problem, it seems to me, is not so much one of how much (as in the amount) of regulation; it's about the content and character of regulation."

Yeah, but the problem as any Public Policy 101 Class will drill into you is the "iron triangle" that will see the special interests with a stake in any regulations either quickly extract whatever teeth they have, or find their way around them. And now they've gotten so good and quick about it....

That's why I argued awhile back for an over-arching, non-"process" regulation that simply gives someone—the Fed?—the power to say essentially say to any corporation "you are getting to big to fail, you may not get any bigger." I hate the idea as big free-market person (former?), but my God look at this sordid bailout carnival. Cieran is exactly right that it's nothing but an Amazon of money flowing upwards.

After all as Andy pointed out there's tons of regulations covering what supposedly is the genesis of all this, meaning the sub-prime mortgage thing. Starting with all the now-hilariously naive ones requiring mortgage lenders to "disclose" in agonizing detail every jot and tittle of what the mortgage means, all in the ridiculous belief that if people know what they're getting into they won't go wrong. Beyond funny now.

And just wait for the worse political shenanigans to start. All these stakes Paulson and the Dems are taking in all these various banks and now probably the car makers: Who is gonna be surprised when they start using that ownership stake to start telling those enterprises to start doing business like they told Freddie Mac and Fannie Mae to do their business?

And as to Sidney's comment, you know Sidney my best econ professors were able to note that there's nothing fundamentally incompatible between Keynesianism economics and the Austrians, although on the margins of course there's always disagreement. And as Nixon acknowledged by saying in 1970 or so that "we are all Keynesians now," there just too much proof that Keynesianism has worked any number of times. When there's been a weakening of confidence in the markets, that's not the time for the gov't to tighten it's belt but to spend and shore that confidence up. In essence, lend some of the confidence people have in it to the private sphere.

My concern with this present thing is that at some point of debt people will lose all confidence in the government *itself,* and *then* what happens? Once people believe that by bailing out the private sector the government itself is only committing suicide itself in way—guaranteeing hellacious future inflation say, or etc.—well hell that's it. Time for everyone to change to gold and keep it under our mattresses and start using cigarettes for currency like in Germany after WWI.

I could see our gov't's early moves in this shoring up and even bailing out a few of the big boys. But it seems to me we've gone way beyond this now. It's like a bunch of drunken monkeys who've broken into a food locker. $85b. for AIG, no ... 125b now; $50-75b for Detroit; GE—GE for God's sakes who doesn't even need it!—sticking its beak in the bowl for some millions. And now comes California and the cities and on and on.

Given that it's the Dems now who seem to constitute most of the monkeys, wonder what Mssr.s Sale and Parker are saying about that? The Republicans are making 'em do it?

I feels sorry for Obama; obviously has a good-faith intent to really do sound things I think, all of which will soon be shown to be impossible given the certainty that it's way too late for that economically. Thus he either condemns his Presidency to being viewed as a Scrooge now and a real hero only to the future and putting things on the right path, or to just join in the game-playing and hope that things don't crash until after he gets out.

Interesting that he seems to like Paul Volcker, the absolute incarnation of a guy who (in my opinion at least) embodies that kind of heroism. Remember how he was excoriated when he was the Fed. Chair under Reagan and he was wringing inflation out of the system and making way for the incredible boom we had for the next 20+ years?

Hope that Obama indeed recognizes this. Like they say, the first sign of insanity is an inability to recognize your friends.

Cheers,

[Hyperion]

This American Life did two programs on the causes of the meltdown. The first started with a statement about how there was all this money around and folks were looking for some way to make it GROW. Then they cited some HUGE number. Silly me, I'm thinking "Got too much cash? Spend it! What's not to like?" But no, they had to invent investment vehicles no one understood and open everyone up to this disaster...all in an attempt to turn a huge pile of money into an even HUGHER pile of money. Greed is a enduring human characteristic.

[john in the boro]

"No, not a commonplace! Hitherto, for instance, if I were told, 'love thy neighbour,' what came of it?" Pyotr Petrovitch went on, perhaps with excessive haste. "It came to my tearing my coat in half to share with my neighbour and we both were left half naked. As a Russian proverb has it, 'Catch several hares and you won't catch one.' Science now tells us, love yourself before all men, for everything in the world rests on self-interest. You love yourself and manage your own affairs properly and your coat remains whole. Economic truth adds that the better private affairs are organised in society—the more whole coats, so to say—the firmer are its foundations and the better is the common welfare organised too. Therefore, in acquiring wealth solely and exclusively for myself, I am acquiring, so to speak, for all, and helping to bring to pass my neighbour's getting a little more than a torn coat; and that not from private, personal liberality, but as a consequence of the general advance. The idea is simple, but unhappily it has been a long time reaching us, being hindered by idealism and sentimentality. And yet it would seem to want very little wit to perceive it..."
“Crime and Punishment”, by Fyodor Dostoevsky

I think the erstwhile Fyodor has captured the essence of trickle-down economics aka neoliberalism. He has also captured how its practitioners justify their actions.

The Sale article is somewhat abrupt, I recommend reading the entire Parker piece http://www.nytimes.com/2008/11/09/books/review/Parker-t.html?_r=1&pagewanted=all&oref=slogin for a more complete picture. I think Parker is on a good track when he locates the current economic disequilibrium and ideological struggle within the more complex historical social sphere in his review of Adolph Berle. We are really talking about how we organize our society. That, in turn, determines how we distribute our incredible wealth, govern ourselves, and treat our fellow man.

Leila suggests an important question about the future of the international financial system. President Bush made a strong plea for the continuation of the status quo with a few reforms around the fringes.

[Sidney O. Smith III]

Hi TomB

You write…”you know Sidney my best econ professors were able to note that there's nothing fundamentally incompatible between Keynesianism economics and the Austrians, although on the margins of course there's always disagreement.”

Can you refer me to any publication and/or written authoritative source that says the same? I am having a difficult time following that one, but I am no economist.

Agree with you re: Volker. Interesting name -- “Volker” -- economist of the Volk, perhaps?