After getting bitch slapped by the "invisible hand of the market" which then told us "hands up" while it picked our collective pockets, it's time to rethink the abusive relationship and appreciate the role of the other, "visible hand."So says Harvard Business School Professor Emeritus Bruce Scott, who asserts it's not so much the "unfettered markets" theory fashionable since Reaganomics, as the effective presence of regulators and regulation that make for workable capitalism.
A key chapter called “The Concept of Capitalism,” has been published independently in advance of Scott's upcoming book.
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| Audio: BBC, PRI & WBUR's Here & Now. Host: Robin Young. | |
Earthquake, tsunami,
The Federal Reserve and Fannie and Freddie are *NOT* part of the free market - they are a part of government.
ReplyDeleteThe financial crisis was caused by government intervention - not the free market. I suggest you read or watch Peter Schiff.
Fannie and Freddie are Government Sponsored Enterprises owned by private stockholders placed into receivership in September 2008 by the Federal Housing Finance Agency. The action was taken because their heavy involvement in the collapsing securitized sub-prime mortgage market.
ReplyDeleteThe interview doesn't address either agency, or the role of the Fed. It does support an argument that regulation helps reduce the chaos of anarchic markets.
Professor Scott: "The crisis did not come from some kind of crisis like a oil shortage or a war or anything. The crisis is a series of mistakes based on teaching in the major universities in the United States. And the teaching has been just plain wrong. It's come right out of the universities: the teaching that markets regulate themselves."
As I grasp it.. "No rules, just right," might be an ok slogan for Outback Steakhouse ads, but it guarantees an exaggerated bi-polar boom and bust "business cycle."
Peter D. Schiff is a gold-ownership advocate, broker-dealer, author, and prophet of impending doom financial pundit from Weston CT whose run for the Republican Senate nomination is 94.8 percent funded from out-of-state contributors, and about 2/3 of his Connecticut money appears to be his own loan to the campaign.
I can't say how his political aspiration relates to his veracity, alacrity or wizardry in matters of finance... Only that one might wish to seek a range of opinion before investing in theory or practice.
If you'd care to watch Mr. Schiff opine, click here.