Richard Posner is an author and federal appeals court judge. He has written more than 2500 published judicial opinions and continues to teach at the University of Chicago Law School. More
My book A Failure of Capitalism: The Crisis of '08 and the Descent into Depression, published just days ago by the Harvard University Press, was finished on February 2 of this year. Much has happened in the more than three months since, and so I decided that as soon as the book was published I would begin to blog on the economic situation in an effort to keep the book up to date, as well as to enable me to rethink my views about the situation on the basis of… More »
I respond here to a number of the substantive comments received in the first week of my Atlantic blogging. I have not attempted to respond to all of them; to some I do not have a good reply! Gabriel Sanchez's comment (follow link for full comment): I take it that you are not arguing that deregulation per se is bad or necessarily prompted by ideological commitments which may, in fact, be out of touch with reality. Even so, there appears to be a general suspicion… More »
I want first to consider the following argument, made by a number of conservative economists, against the $787 billion stimulus enacted by Congress in February. The argument is that since savings equals investment, if the government borrows money to finance public investment (say in the form of a public-works program, such as highway construction or repair) this reduces by the identical amount the money available for private investment; and therefore only if the… More »
I want to consider three important intertwined questions concerning the depression. The first is why the government places so much emphasis on the banking industry and how effective its banking-related measures have been; the second is whether the stimulus program ($787 billion in government deficit spending to jump-start the economy) is, as some conservative economists claim, utterly futile; and, connected to both issues, what the long-run effects of the present… More »
With the economy appearing to begin to stabilize, more attention is being given to possible measures for preventing a recurrence of an economic crash as calamitous as this one has been and continues to be. Advocacy of specific measures seems to me premature, however. This is not only because proposals for overhauling the regulation of banking adds additional uncertainty to the economic environment. It is also because the reform of banking regulation is an immensely… More »
So how should the recovery efforts undertaken since February 2, which I discussed in my last two blog entries, be rated? On the whole, I consider them positive. The "easy money," bank bailouts, auto bailouts, and stimulus measures, costly as they are, are justified by the nontrivial risk that in their absence the economy would plunge almost as far as it did in the 1930s depression. Not that that risk can be quantified; but it seemed to the responsible officials in… More »
I turn to the remaining components of the current depression-recovery package. (4) I argued in my book that the government was right to lend money to General Motors and Chrysler in December to avert their being forced to declare bankruptcy. The shock effect of such bankruptcies, and their potential effect on employment because more than a million workers are employed by these companies or their dependencies (dealers and parts suppliers), provided compelling reasons… More »
By February 2, when I finished my book, the government had already adopted, or signaled the imminent adoption of, a number of policy responses to the depression, and I discussed these in the book. In the two months since, there have been a variety of new developments on the policy front, many quite dramatic and some important. But none has changed the fundamental character of the anti-depression program that could be discerned in the earliest days of the Obama… More »
My book A Failure of Capitalism: The Crisis of '08 and the Descent into Depression was completed on February 2 of this year. That was the day I sent the edited manuscript back to the publisher (Harvard University Press) to be put into page proofs. After February 2, I could not make any substantive changes. Of course February 2 was not the end of the economic crisis, or of the government's response, or of my education in depression economics; and so my intention… More »
A distinguished jurist advises us to calm down about the probable curtailing of some personal freedoms in the months ahead. As a nation we've treated certain civil liberties as malleable, when necessary, from the start
