Re: Joseph Stiglitz on Capitalist Fools: How We Crashed the Economy

[David Farber <dave () farber net>]

Begin forwarded message:

From: "Kurt Buff" <kurt.buff () gmail com>
Date: December 10, 2008 8:49:38 PM EST
To: dewayne () warpspeed com, dave () farber net
Subject: Re: [IP] Joseph Stiglitz on Capitalist Fools: How We Crashed  
the Economy

Two snippets:

"Because they did very little to stimulate the economy, real
stimulation was left to the Fed, which took up the task with
unprecedented low-interest rates and liquidity."

and

"The flood of liquidity made money readily available in mortgage
markets, even to those who would normally not be able to borrow."

I.E., inflation. For someone who is supposed to be a Randite,
Greenspan sure didn't follow the spirit or letter of her teachings,
nor of basic economics in general.

Students of Murray Rothbard, Ludwig von Mises and Friedrich Hayek know
what happened - inflation, leading to unsustainable malinvestment,
which is the usual reason for bubbles and crashes. Rothbard's book
America's Great Depression draws this lesson quite clearly, and the
parallels are quite striking between then and now.

Kurt

On Wed, Dec 10, 2008 at 4:36 PM, David Farber <dave () farber net> wrote:
> Begin forwarded message:
>
> From: dewayne () warpspeed com (Dewayne Hendricks)
> Date: December 10, 2008 12:36:25 PM EST
> To: Dewayne-Net Technology List <xyzzy () warpspeed com>
> Subject: [Dewayne-Net] Joseph Stiglitz on Capitalist Fools: How We  
> Crashed
> the Economy
>
> Joseph Stiglitz on Capitalist Fools: How We Crashed the Economy
> by TomP
> Wed Dec 10, 2008 at 05:24:18 AM PST
> <http://www.dailykos.com/storyonly/2008/12/10/82418/061/679/670543>
>
> Joseph Stiglitz won the Nobel Prize for economics in 2001.  He was  
> Chairman
> of the President's Council of Economic Advisors from 1995 to 1997  
> for Bill
> Clinton.  He is also the former Senior Vice President and Chief  
> Economist of
> the World Bank.  He opposed financial industry deregulation under  
> Clinton,
> fought with Larry Summers, who is now Obama's chief economic  
> advisor, over
> regulating derivatives (Stiglitz wanted to, but Summers won and that  
> wrong
> decision contributed to the mess we are in.)  Stiglitz, while favoring
> trade, has questioned some of the faith-based beliefs of the free  
> trade
> fundamentalists.
>
> Stiglitz has an excellent article in Vanity Fair on how we got to  
> the worst
> economic times since the 1930s.  He points to five key mistakes—under
> Reagan, Clinton, and Bush II—and one national delusion.
>
> The truth is most of the individual mistakes boil down to just one:  
> a belief
> that markets are self-adjusting and that the role of government  
> should be
> minimal.
>
> [snip]RSS Feed: <http://www.warpspeed.com/wordpress>
>
>
>
>
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