If you watched the program on air or online tonight, you saw a portion of my interview with Simon Johnson. Johnson is a former Chief Economist of the International Monetary Fund, and now he's a professor at MIT's Sloan School of Management. He recently authored an interesting article in The Atlantic. Among the ideas he included in the article is that "elite business interests" in the U.S. helped cause this financial crisis. Johnson discusses this "financial oligarchy" and how to deal with it in our interview. You can watch the extended version of that interview below. (You need Flash installed to watch.)
Comments
Having read the article, which is online here: http://www.theatlantic.com/doc/200905/imf-advice I feel I should make some criticisms of it. It is not, as he alleges there, that we became wealthy in the 80's and 90's, but, rather, we became inflated and increasingly dependent on the support of emerging mkts. He is right tho that no matter it benefited the financial sector disproportionately. And while the oligarchy he describes is clearly holding up change, this is not compatible with the idea that the govt must act in a panic with overwhelming force if he means by that with a lot of free money. I am not sure tho that he means that. I had thought him taking the Austrian view, but it seems he is closer to the usual Keynesian (to be expected I suppose from someone at MIT) except that like Krugman he is for taking over the banks. Actually, this is mandated by existing law, but that law has been so far ignored. He cites an IMF estimate that this would take $1.5 trillion, but I do not see, however, why any taxpayer money should be expended in the process. It would be just robbing Peter to pay Paul. He is also wrong in citing FDR in opposition to TR. FDR came to office on a sound money, balanced budget ticket, condemning the easy money, big govt policies of the Republicans and the Hoover admin in particular. TR, on the other hand, I believe, supported the central-banking credit-creation idea like other Progressives. He is right tho about the Depression deepening as a result of problems in Europe and its banking sphere of influence coming over after a recovery of sorts had started here, and I thought perhaps he had read Lionel Robbin's 1934 account (available online here: http://www.mises.org/books/depression-robbins.pdf), but it seems not. Most of the article stems from his experience over the years at the IMF and elsewhere with other economies in crisis, and offers a valuable perspective, particularly, I'd hope, to those who think this country is somehow exceptional. I do agree, and have said so several times in the past year of more, that this could be worse than the Depression, the reason being in my view because of the immense reliance the rest of the world has been led to place on the American mkt, as it did on Europe in the 19th and early 20th c, which is clearly unjustified, and they will have great political problems with their own oligarchs in developing alternative mkts at home.
Actually populists were more interested in easy money, not trust-busting. But I enjoyed this. Going to find the article now.