Curtis Bowman

Mark Blyth on the Austerity Delusion

Paul Krugman's latest fulmination against austerity economics mentions a new book by Mark Blyth entitled Austerity: The History of a Dangerous Idea. The author's name and his subject matter rang a bell, and then I remembered that Professor Blyth published an essay adapted from his book in the May/June issue of Foreign Affairs.

I went in search of more information about Professor Blyth, and I found this entertaining video critique of austerity economics that he made a while back:

It's refreshing to see someone acknowledge so forthrightly the class politics in the recent turn to austerity. I'd have greater respect for economists if more of them recognized the political aspect of their discipline. After all, economics used to be called political economy for a reason.

The Pew Research Center on the Lost Decade of the Middle Class

A new survey from the Pew Research Center looks at how the middle class has taken it on the chin during the past decade.

Here's a video that briefly summarizes the main findings:

The complete report (PDF, 2.3 MB) makes for rather grim reading.

Two Passages From Roger Bootle's "The Trouble With Markets"

I recently read Roger Bootle's The Trouble with Markets: Saving Capitalism from Itself. If you're looking for an intelligible, not especially technical explanation of the causes of the financial crisis, then this might be the book for you. I read the revised and expanded paperback edition.

Mr. Bootle's book is well written, but two passages really jumped out at me.

Here's the first, from page 181:

Is there a need to do anything at all? Indeed, is there anything that can usefully be done? According to some people, recessions clean things up and sort things out. So, far from complaining about the recession or trying to stop it, we should simply lie back and enjoy it.

I see things differently. Yes, a little bit of recession can sometimes do you good. So too, I am told, can the occasional cold bath. But spending the whole day immersed in freezing water is not to be recommended. The current economic downturn has gone well beyond a short, sharp dip. The fashionable phrase for crisis deniers is "creative destruction," first coined by the economist Joseph Schumpeter. However, remember that this phrase and the associated idea only gained traction from the contrast with their more frequently observed cousin, destructive destruction.

Here's the second, from page 217:

It has long amused me that the doctrine of efficient markets, and the much looser but wider endorsement of free markets in general, find their strongest supporters in university economics and finance departments, by and large peopled by individuals who, protected by their tenured appointments at not-for-profit institutions, never come face to face with the capitalist system in action. They are the ones who blithely assert the case for free markets, even to the point of arguing the merits of allowing the whole financial system to be allowed to implode, confident in its later resurgence, stronger and healthier—and presumably in the resilience of their own pension schemes. They would not last five minutes on a trading floor before being eaten alive.

Taken together, these two passages express an idea that I've often had, namely, that those who most vociferously extol the virtues of capitalism are never those whose jobs are creatvely destroyed by the workings of the marketplace. This has always struck me as morally obnoxious, especially when those whose jobs have survived untouched use their influence to obstruct or defeat policies designed to help those who have been thrown out of work through no fault of their own.

Anyway, I recommend Mr. Bootle's book to your attention.

Warren Buffett Thanks Uncle Sam

Warren Buffett has sent a charming thank-you note to Uncle Sam for bailing the country out of the economic crisis of 2008.

Why the Economic Slump Continues

Paul Krugman and Robin Wells explain why we're still in an economic slump.

Update - October 1, 2010: Here's the second part, in which Krugman and Wells discuss the way out of the slump.

Harold Meyerson on the U.S. Jobs Machine

Harold Meyerson looks at how the U.S. jobs machine has ground to a halt.

Harry Markopolos on Trying to Expose Bernie Madoff

Here's an excerpt from No One Would Listen: A True Financial Thriller, Harry Markopolos's new book, in which he explains how he discovered that Bernie Madoff was running a Ponzi scheme. As the book title indicates, Mr. Markopolos tried to expose Madoff but for a long time no one would listen.

James Surowiecki on Economic Populism

James Surowiecki analyzes the incoherence of the latest form of economic populism.

Jeffrey Pfeffer Makes the Case Against Layoffs

Jeffrey Pfeffer explains why layoffs, in addition to the human toll they take, typically make things worse for the companies doing the downsizing.

BusinessWeek on the Disposable Worker

BusinessWeek looks at the growing ranks of the disposable worker.

It's just this sort of thing that regularly keeps me reaching for Karl Marx's economic and philosophic manuscripts of 1844, especially his discussion of estranged labour.