from The Daily Bell:
The Ways That Pop Economics Hurt America … Someone needed to write a book about how economic theory has been abused in American politics. And someone finally did. James Kwak’s “Economism” is a very important and timely book, and anyone who is interested in public affairs should pick up a copy and read it. Kwak, a law professor at the University of Connecticut, spins a tale of how simple supply-and-demand theory fed a free-market ideology that led to a financial crash, a dysfunctional health-care system, spiraling inequality and a threadbare social-safety net. – Bloomberg
The idea that America has free markets is laughable. But this book apparently starts with the idea that people simply want to reinforce what America already has and add to it. In fact, as long as America has monopoly, “Federal Reserve” money, free markets won’t exist in the US.
Now add in the millions of regs preventing anything like a free market from existing and you have recipe for increasing quasi-monopoly and monopolies. Undoing a few regs and then claiming that you have opened up an industry is simply incompatible with reality.
The basic idea is that by getting everyone to think in Econ 101 terms — perfectly competitive well-functioning markets, rational well-informed consumers and so on — free-marketers were able to redefine the terms of the national debate to favor their own interests.
With Econ 101 as the default lens through which everyone views the world, Kwak argues, government programs and regulations start to seem dangerous and inefficient, while inequality begins to feel like the natural of things.
When competitive free markets and rational well-informed actors are the baseline assumption, the burden of proof shifts unfairly onto anyone proposing a government policy. For far too many years, free-marketers have gotten away with winning debates by just sitting back and saying “Oh yeah? Show me the market failure!”
The market failure is inevitable of course. And people like Peter Schiff, a libertarian, have minced no words about it. When markets are already regulated and their functioning is likened to monopoly central banking as well, then there is little that can be done to avoid the inevitable crash.
The article doesn’t touch on any of these fundamental points and thus in this way can be said to be dishonest. It is not possible to simply make a few deregulations and declare a market has become free.
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