Something to Consider

Two--no, three--articles to consider:

The failure of economists to predict Depression 2.0. (And some questions about financial economics.

Robert Lucas rebuts here.

My half-witted take: the efficient-markets hypothesis rests on...never having interacted with real people or something...seriously, how much irrationality dances in front of your eyes every day when walking around in the world?...have you watched people drive lately?)

How/why economists failed in predicting Depression 2.0. Krugman writes long but well.

Remember Keynes

Some self-referential B.S., but remember this stuff when evaluating GOP economics analysis/arguments.

Capitalism American Style

It's not in very good shape, regardless of any sort of "recovery". By that, I mean the structure of capitalism is morphing, not really into right-wing fears of incipient "socialism" (there isn't much government ownership of the means of production, after all), but into plutocracy. Adam Smith wasn't envisioning plutocracy, by any means. Evidence follows---

While intervening in financial crises that threaten to sink the whole economy is understandable, this is ridiculous:

Last October, Congress passed the Emergency Economic Stabilization Act of 2008, putting $700 billion into the hands of the Treasury Department to bail out the nation’s banks at a moment of vanishing credit and peak financial panic. Over the next three months, Treasury poured nearly $239 billion into 296 of the nation’s 8,000 banks. The money went to big banks. It went to small banks. It went to banks that desperately wanted the money. It went to banks that didn’t want the money at all but had been ordered by Treasury to take it anyway. It went to banks that were quite happy to accept the windfall, and used the money simply to buy other banks. Some banks received as much as $45 billion, others as little as $1.5 million. Sixty-seven percent went to eight institutions; 33 percent went to the rest. And that was just the money that went to banks. Tens of billions more went to other companies, all before Barack Obama took office. It was the largest single financial intervention by Treasury into the banking system in U.S. history.

But once the money left the building, the government lost all track of it. The Treasury Department knew where it had sent the money, but nothing about what was done with it. Did the money aid the recovery? Was it spent for the purposes Congress intended? Did it save banks from collapse? Paulson’s Treasury Department had no idea, and didn’t seem to care. It never required the banks to explain what they did with this unprecedented infusion of capital.

And then there's this analysis:

People are pissed off about this financial crisis, and about this bailout, but they're not pissed off enough. The reality is that the worldwide economic meltdown and the bailout that followed were together a kind of revolution, a coup d'état. They cemented and formalized a political trend that has been snowballing for decades: the gradual takeover of the government by a small class of connected insiders, who used money to control elections, buy influence and systematically weaken financial regulations.

The crisis was the coup de grâce: Given virtually free rein over the economy, these same insiders first wrecked the financial world, then cunningly granted themselves nearly unlimited emergency powers to clean up their own mess. And so the gambling-addict leaders of companies like AIG end up not penniless and in jail, but with an Alien-style death grip on the Treasury and the Federal Reserve — "our partners in the government," as Liddy put it with a shockingly casual matter-of-factness after the most recent bailout.

The mistake most people make in looking at the financial crisis is thinking of it in terms of money, a habit that might lead you to look at the unfolding mess as a huge bonus-killing downer for the Wall Street class. But if you look at it in purely Machiavellian terms, what you see is a colossal power grab that threatens to turn the federal government into a kind of giant Enron — a huge, impenetrable black box filled with self-dealing insiders whose scheme is the securing of individual profits at the expense of an ocean of unwitting involuntary shareholders, previously known as taxpayers.

This is all particularly galling when the same corporate interests who picked the Treasury's pockets also spend large sums of money to lobby against national health insurance.