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A conversation with author Richard Posner about his book "A Failure of Capitalism The Crisis of 08 and the Descent into Depression"
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cmghouston 07/14/2009 01:15 PM Report
It is a really interesting interview. It highlights when RP says about President Obama.." I think he is very intelligent, he is charismatic...If he doesn' t succeed I think the country will be in troubles"..All it depends on Obama??
REMant 06/12/2009 12:20 AM Report
My first thought was to say that he doesn't seem to understand anything, but to be honest so little of substance emerged in the interview that the book will have to be read to make any fair comment. Nevertheless, the problem was caused by monetarists and primitivist supply-siders. As Greenspan admitted they didn't believe ppl could not see their own self-interest, to put it sympathetically. Actually I think a great deal of fundamentalist enthusiasm was also involved, the sort that says the Lord helps those who help themselves. And help themselves they have. To my mind get rid of monetary and fiscal deficits by requiring sound money and balanced budgets and the free mkt will work, if not perfectly, a whole lot better. I do not, however, think that govt entities have any monopoly on corruption. Secondly, there is no downward spiral. What is happening is that activities sustained only by unsustainable monetary and fiscal policies, are being terminated, and they must be, unless somehow made productive. Prices will stabilize at sustainable levels. And it doesn't take more debt to make things more productive, it takes LESS. Let me try a simple illustration. Suppose your house is hot in the summer. You put in air conditioning. The air conditioning uses electricity, the electricity is generated by burning coal, the emissions contribute to global warming, so that an increasing amount of the benefit of the air conditioning is lost the more you use it. The capital is being whittled away. But let us suppose that instead of putting in air conditioning, you plant a few trees, put in floor-to-ceiling windows, and an awning or two. If you are building a new house, higher ceilings, better insulation, etc. You have spent perhaps no more, but will not have any recurring costs, and certainly not any that will accelerate. Indeed the more ppl do that the cooler the climate becomes. Your capital increases. Not because it is more in demand, (altho that does happen also,) but because it is more productive. The increase lies in actually solving the problem of how to stay cool, not in the consumptive expenditure of energy. I HAVE noticed, I believe, a downward spiral in our ability to conceptualize, define purposes, solve problems, and design things, that seems to parallel the aforementioned enthusiasm.
hrc 06/11/2009 11:52 PM Report
So, in other words, he is in favor of inflating our way out of this mess, and wanted to share that with us as an optimal solution.