Potpourri
* Here is Nouriel Roubini explaining that laissez-faire capitalism has failed. I’m not sure how the Federal Reserve (which caused the boom) or the trillions in bailouts and other rescue moves (which caused/exacerbated the financial panic) qualifies as laissez-faire. But beyond that quibble, I love how Roubini lists all of the things that can go wrong with more regulation (such as regulatory capture and jurisdictional arbitrage), and basically says, “So the politicians should avoid those pitfalls when saving the world.”
* Have you ever wondered how economies got out of liquidity traps before the advent of wise countercylical fiscal policy? Krugman explains in this post. Apparently what happens is that the capital stock wears out and thus businesses have no choice but to go invest. (BTW Krugman links to this New School outline of Keynesian Business Cycle Theory, which I haven’t read but looks like it might be interesting.)
* Here’s a disgusting story of two Pennsylvania judges who took payoffs from “private” juvenile prison camps–that’s my term, but it’s what they were!–in exchange for finding defendants guilty and shipping them to the companies. (Presumably the companies got paid per “criminal” processed.) I am sure a lot of leftist prisoner advocates are going nuts about this, saying that you can’t bring in the profit motive to something like justice. But on the contrary, this just shows how screwed up the government is. It was the government judges who abused their awesome power over these kids’ lives. To switch contexts, suppose it turns out that the owners of that Georgia peanut butter factory paid off the FDA inspectors to look the other way. Would that prove profits and peanut butter don’t mix, and that the government should nationalize Skippy and Jif along with Bank of America?
* Wintery Knight has an interesting follow-up discussion to my post from last Sunday. I had wondered why Jesus spoke in parables (rather than plainer language), and Wintery Knight discusses God’s “hiddenness” more generally.
