Wednesday, March 26, 2008

My Response to (Another) Article

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.

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