Rethinking the Economy

William Greider’s promoting an interesting idea about how to radically restructure the Federal Reserve. The crux of his idea comes from one of the least understood powers of the Federal reserve: it can essentially create money.
During the past year, the Fed has flooded the streets with money–distributing trillions of dollars to banks, financial [...]

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A story like this seems to pop up about every decade. From the July 28 Washington Post:
At a recent town-hall meeting in suburban Simpsonville, a man stood up and told Rep. Robert Inglis (R-S.C.) to “keep your government hands off my Medicare.”
“I had to politely explain that, ‘Actually, sir, your health care is [...]

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Speaking of the emotional map of a good economic model, this excerpt from a Bill Moyers round table discussion really struck me:
SERENE JONES [President of Union theological seminary]: You ask how you would define this crisis? I think it’s a crisis of value. We have misplaced, in deep ways, the ruler that [...]

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This weekend I heard a Republican politician on the radio arguing his health care plan was “pro-free market” and Obama’s was more “big government.” But his plan would stop insurance companies from being able to turn anyone away.
Okay people, let’s get real. It’s one thing to say you want to get the government out of [...]

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In an aggressively global economy, do we really have any power anymore? If we try to change the rules in the US, won’t business just outsource everything to China?
Actually, according to BusinessWeek, Europe just showed us we’ve got a lot more power than you think. Europe’s in the middle of passing a bunch of new [...]

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In my last post, I complained Robert Kuttner didn’t really capture the government’s role in the market. Ironically, he also didn’t capture what I love about the market.
Kuttner, Dean Baker, Jamie Galbraith, they’ll all write that “markets accomplishments much superbly,” “the market is an incredibly powerful force,” etc. But they sound like a little [...]

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Every once in a while I come across a stat that blows me away. I write it down on a scrap of paper, and I can’t find it again. So, since this blog is essentially a public journal, I’m going to start storing them here.
One of the reasons why the financial system can cause so [...]

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Krugman nicely sums up a big problem with the incentives players have in the financial ecosystem:
The huge bonuses Goldman will soon hand out show that financial-industry highfliers are still operating under a system of heads they win, tails other people lose. If you’re a banker, and you generate big short-term profits, you get lavishly rewarded [...]

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I’ve been reading Robert Kuttner’s The Squandering of America . Although it’s a very smart, nuanced analysis, the economic theory behind it has the same problem that a lot of folks on our side have when they talk about the relationship between the government and the market.
Here’s Kuttner’s theory in a nutshell:
Markets are useful [...]

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The next time someone tries to scare you about the cost of health care for all, here’s a nice stat from Krugman. The Congressional Budget Office just published an analysis of the Senate’s health care bill.
The budget office says that all this would cost $597 billion over the next decade. But that doesn’t include the [...]

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