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Showing posts from April, 2014

Imagine if we had free prices!

If you were asked how we should go about achieving real economic growth throughout the economy rather than just certain sectors of it, what would you suggest?Would you revisit the Keynesian toolbox and call for a really, really big stimulus instead of just another really big one?Would you impose more controls on business, especially the financial sector?Some people want to revive Glass-Steagall, the gem from the Depression era that was abandoned in 1999 — sound good to you?.How about officially merging the Fed and the Treasury — i.e., turn “monetary policy” over to the government?Perhaps you’d break out Sheila Bair’s plan to allow each American household to “borrow $10 million from the Fed at zero interest”?Her proposal was tongue-in-cheek, you say? Ms. Bair, the former head of the Federal Deposit Insurance Corporation, proposed a plan that in its essentials would be received enthusiastically by those in the know —provided it was confined to special interests. But if it’s good for som…

Beware of packaged thinking

Doing the same thing over and over again and expecting different results is colloquially defined as insanity, per a quote attributed to Albert Einstein.Call me insane, but I wince whenever I hear this.As a rule of thumb it’s fine but it can be slippery.I’m reminded of another quote from the Greek philosopher Heraclitus who is alleged to have said, “A man cannot step into the same river twice, for it is not the same river and he is not the same man.”
Heraclitus, in other words, would say it is not possible to do the same thing over and over.  We may think we’re doing the same thing, but on closer inspection we’re not.  We never are.  He has a point: If couples took Einstein’s quote literally when trying to procreate, there would be far fewer of us around.  
In matters of government there is a fundamental tension between Einstein and Heraclitus.  Defenders of government tend to favor Heraclitus — it’s not the coercive approach that’s wrong, it’s the particulars of the approach.  Better pe…