tag:blogger.com,1999:blog-1527766217650773141.post6516809912506681901..comments2023-07-12T06:12:30.772-07:00Comments on Demand Side Transcript: James Kwak has it in for Richard Posner, and so do IAlanhttp://www.blogger.com/profile/07323700324276425194noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-1527766217650773141.post-61234275690696774292010-03-21T17:14:42.684-07:002010-03-21T17:14:42.684-07:00Posner sees no great ideas because he has been tra...Posner sees no great ideas because he has been trained and co-opted into market fundamentalism. Perhaps it is a good sign that he has had some change of heart. The good ideas of Stiglitz, Galbraith and others are invisible to him by reason of his own blinders, not because they do not exist.Alanhttps://www.blogger.com/profile/07323700324276425194noreply@blogger.comtag:blogger.com,1999:blog-1527766217650773141.post-54135879537463697252010-03-20T15:51:53.551-07:002010-03-20T15:51:53.551-07:00I also have to agree that Posner misses the fact t...I also have to agree that Posner misses the fact that their are great ideas about how to mitigate the possibility of future crises. One is a simple return to Glass-Steagall. Second is a use of reserve deposits by central banks. These would take capital from banks and hold it in the central bank. This has the effect of reducing the banks working capital and its ability to lend excessively. This could be with the Federal Reserve, though since they never see bubbles anywhere this looks like a useless option in the US. Until you have a regulator that does their job then that is unlikely.<br /><br />There are other measures that could be used such as financial product reform so that consumers cannot be hoodwinked into taking more risk than they want. <br /><br />Tax reform so that capital gains are treated on the same basis as income. That would stop so much effort going into rigging accounts to show false profits so gaining tax advantages. <br /><br />Fixing national statistics so that they very rarely change. If governments can change definitions of unemployment for example to avoid the painful reality of the failure of their policy then that would allow people to actually see what works. <br /><br />Posner is wrong on the fact that there are no great ideas. The problem is that they are objectionable for political reasons not economic reasons.David Lazarusnoreply@blogger.com