[ExI] Posner abandons Chicago School economics

BillK pharos at gmail.com
Thu Mar 18 10:48:55 UTC 2010


Slapped by the Invisible Hand
Richard Posner has steadfastly fought the regulation of markets—until now.

<http://www.businessweek.com/magazine/content/10_11/b4170068391028.htm>

The Crisis of Capitalist Democracy
By Richard A. Posner
Harvard; $25.95; 408 pp

Quotes:
Posner less than a year ago began his dissection of the crisis of 2008
with A Failure of Capitalism (Harvard, May 2009).  As an influential
free-market thinker, he helped shape the antiregulatory ideology that
inspired so much public policy since 1980. Belatedly he admits error.
The Chicago School and all its powerful acolytes blundered, Posner
writes, "by persuading themselves that markets were perfect, which is
to say self-regulating, and that government intervention in them
almost always made things worse."

That was a crude misreading of history. Laws inspired by the Great
Depression helped achieve a half-century without catastrophic
meltdowns. The dismantling of those laws and emasculating of the
agencies established to enforce them—without the enactment of new
regulation suited to today's Wall Street—go a long way toward
explaining our recent brush with disaster.
End quote.
-----------------------

Some economics bloggers are rather contemptuous about Posner (and
Greenspan) 'seeing the light' after ten years of pontificating about
the glories of 'unregulated-markets'.

<http://baselinescenario.com/2010/03/17/richard-posner-has-another-book/>

The first comment on the above blog article is very scathing.

Quote:
A possible reason why the P***ers of this world are/were unable to see
the need for regulation was because just maybe one of the following
was well and truly in place – still (choose).

1. I don’t want to know as we are making bags of money in the
scammer’s paradise.
2. Regulation doesn’t win me friends or sell books or gain consulting jobs.
3. Singing the same song as the other players makes me a team animal
4. Recognizing uncontrolled risk means I must inevitably recommend
shutting down the money spigot – ouch who threw that brick?
5 Lobbyists will let a contract on me?
6. We may gsin more efficient function via network management (see
power distriution networks, highway traffic flow management) but like
most other people, I am a greedy, venal, avaricious harvester (aha I
see another sucker).
7. Punishment is reserved for the careless, we are home free and clear
(no Elliott Ness allowed).

One may choose one or more of the above. Now one could create a
control system in 30 days (how long did it take to respond to Pearl
Harbor) but are our lemming elected politicians part of the problem?

Conclusion: This makes the mafia look like a neighborhood candy
stealing racket in the land of the free. Seems like the folk we
elected to clean up are part of the mess.
-------------------------

BillK




More information about the extropy-chat mailing list