Nationalize the Fed!

Paul Krugman’s wife, Robin Wells, came out with a piece arguing Occupy Wall Street’s issues are something economists should address. I wonder whether she thinks biologists should all teach about creationism because so many students believe in some sort of transcendental spark to life. Probably not. I do think there should be classes on free markets vs. Keynesian debates led by different professors, because it’s not like this issue isn’t always there, but I don’t think academics should crater to the masses whenever they hold demonstrations.

I find the Occupy Wall Street movement profoundly pre-adolescent, like when my 4 year old daughter throws a tantrum. For example, they generally are proud of not having explicit objectives, being grass-roots and all, and so fundamentally do not understand that decisions will never, can never, reflect everyone’s preferences. Some souls did create a wiki of beliefs, that are the best we can address of this movement, which includes things like ‘balance’ and ‘protecting human rights’ . It’s easy to want such things, and such rights were in the Soviet Union’s 1936 Constitution just after committing genocide against the Ukrainians and finishing off remaining Kulaks (all for the greater good). They act as if Rousseau’s social will exists, that everyone shares some trans-human soul with a preference towards drum circles and organic legumes.

I got a kick out of this:

  • Transitioning the IMF and World Bank into transparent, publically owned and operated entities
  • Ending the Federal Reserve Bank and replacing it with an accountable, decentralized, transparent and publically owned financial system.

These institutions were created by democratic governments, populated primarily by those on the left (my friends who went this route were all conventional Liberals). That they are considered insufficiently transparent and unaccountable highlights that reality never creates the social vision they seek, which is some sort of transparent consensus on matters of incredible technicality. You see the same thing with Noam Chomsky, were socialism always is to be encouraged, but any time it happens, as in the Soviet Union, the Eastern Bloc, or Cambodia, these are considered ‘true’ socialism (if only Trotsky won!). Their naive beliefs do not work because they aren’t feasible, and so too the idea that large banks can be some big cookie jar for agreed-upon investments as opposed to being administered by professionals.

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About Eric Falkenstein 136 Articles

Eric Falkenstein is an economist who specializes in quantitative issues in finance: risk management, long/short equity investing, default modeling, etc.

Eric received his Ph.D. in Economics from Northwestern University , 1994 and his B.A. in Economics from Washington University in St. Louis, 1987

He is the author of the 2009 book Finding Alpha.

Visit: Eric Falkenstein's Website

1 Comment on Nationalize the Fed!

  1. So why aren’t you commenting on the equally pre-adolescent ideal of the “free market”? “Free markets” are about as real as the unicorn. It’s very easy to bash the left or right, it’s much harder to come up with real answers to real problems.

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