An Open Letter to Gary Becker re: Depressions

Dear Professor Becker: I was pleasantly surprised to see you seriously entertain the notion that “depressions”—for younger readers, the term economists used to use for what we now call “recessions”—might serve a socially useful function. This is a crucial issue, as the government has already committed more than one trillion dollars, and assumed incredible powers, in an attempt to deny this.

Should We Worry About Deflation?

Yes, the current economics brain trust is worried that consumers will collectively show the good sense to delay purchases, pay down debt, and increase their savings. After all, this liquidation of malinvestments will likely take a while. The prudent thing to do in times of uncertainty is not to ramp up debt and spend money you don’t have. But now, all of a sudden, “saving” is a dirty word.

The TARP Is Dead, Long Live the TARP

Congress gave Paulson $700 billion, and the first thing he did was give $125 billion to his pals at the nine biggest banks and investment banks in the country. Never one to display ingratitude, he gave $10 billion to Goldman Sachs, the firm he had headed before passing through the revolving door to the Treasury. So generous was he that he handed out $290 billion of the $350 billion that Congress authorized him to spend immediately.

Posner and Leviathan

Justice Posner has himself failed to consider the extent to which government intervention caused the recent crisis, among others. Hayek and Mises were ahead of the curve back in the 1920s when they identified governmental intention, particularly credit expansion, as the cause of the business cycle. Most of the economics profession came to blame government for the Great Depression only gradually.

Jobarama: Obama’s “Investment”

With all of the talk of how charismatic Barack Obama is, or of his oratory ability—and especially given his recent presidential victory—it is time to engage in a deeper economic critique of Obama’s actual policies. Once we see the true effects of his policies and the incentives they create, we will see that his leadership skills and abilities make him more of a threat to freedom than if he were less articulate.

Obama Transition Team Member on “Optimizing” the Patent System

As noted here here, one of Obama’s transition “team members is Reed Hundt, who was Bill Clinton’s FCC Chair from 1993 through 1997. Hundt is slated to work on the agency review team in charge of international trade and economics agencies.” In a 2006 Forbes op-ed, Hundt had various suggestions for patent reform. They are not all terrible, but they continue to miss the point by struggling to find some way to make the system work better.

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