Richard Epstein and John Taylor reflect on the global economic crisis of 2008 and discuss why the Keynesian narrative of events fails to identify and explain the causes at the root of the crisis. Epstein and Taylor evaluate the government responses to the crisis, assessing the effectiveness of TARP and President Obama's stimulus legislation.
Finally, Epstein and Taylor lay out the future steps that government must take to ensure recovery and growth. Key among them: "Don't raise taxes."
Bio
Richard Epstein
Richard A. Epstein, the James Parker Hall Distinguished Service Professor at the University of Chicago, is the Peter and Kirsten Bedford Senior Fellow at the Hoover Institution. Epstein is also, a visiting professor at NYU Law School.
Peter Robinson
Peter M. Robinson is a research fellow at the Hoover Institution, where he writes about business and politics, edits the Hoover Institution's quarterly journal, the Hoover Digest, and hosts Hoover's television program, "Uncommon Knowledge."
Robinson is also the author of three books: How Ronald Reagan Changed My Life; It's My Party: A Republican's Messy Love Affair with the GOP; and the best-selling business book Snapshots from Hell: The Making of an MBA.
John Taylor
John B. Taylor is the Mary and Robert Raymond Professor of Economics at Stanford University and the Bowen H. and Janice Arthur McCoy Senior Fellow at the Hoover Institution. He formerly served as the director of the Stanford Institute for Economic Policy Research, where he is now a senior fellow, and he was founding director of Stanford's Introductory Economics Center.
Taylor's academic fields of expertise are macroeconomics, monetary economics, and international economics. He is known for his research on the foundations of modern monetary theory and policy, which has been applied by central banks and financial market analysts around the world. He has an active interest in public policy.
John Maynard Keynes, detail of a watercolour by Gwen Raverat, about 1908; in the National Portrait …Courtesy of the National Portrait Gallery, London(born June 5, 1883, Cambridge, Cambridgeshire, Eng.—died April 21, 1946, Firle, Sussex) British economist, known for his revolutionary theories on the causes of prolonged unemployment. The son of the distinguished economist John Neville Keynes (1852–1949), he served in the British treasury during World War I and attended the Versailles Peace Conference. He resigned in protest over the Treaty of Versailles, denouncing its provisions in The Economic Consequences of the Peace (1919), and he returned to teaching at the University of Cambridge. The international economic crisis of the 1920s and '30s prompted him to write The General Theory of Employment, Interest and Money (1935–36), the most influential economic treatise of the 20th century. It refuted laissez-faire economic theories, arguing that the treatment for economic depression was either to enlarge private investment or to create public substitutes for private investment. Keynes argued that in mild economic downturns, monetary policy in the form of easier credit and lower interest rates might stimulate investment. More severe crises called for deliberate public deficits (seedeficit financing), either in the shape of public works or subsidies to the poor and unemployed. Keynes's theories were put into practice by many Western democracies, notably by the U.S. in the New Deal. Interested in the design of new international financial institutions at the end of World War II, Keynes was active at the Bretton Woods Conference in 1944.
One angle in all of this that I never hear economists discussing is the role of the internet in how things have played out. In this day and age where people can access their bank/investment accounts online and perform near-instantaneous transactions, what sort of effect, if any, does this have upon market self-corrections? I recall shortly after the dot com bust back in 2001 where online trading businesses were being hammered for allowing day traders to buy and sell throughout the day, causing volatility in the stock market. Since they responded by capping the number of allowed daily transactions of the same stock, or various other policies, I have to assume there is some merit to the notion of modern technology negatively influencing our financial systems.
Why shouln't a free citizen be able to buy whatever he wishes? What business is it of yours? I am certain you buy things I would never buy in a millions years, but it's a free country, and should be a free world.
Certainly you are not implying non-market based, collectivist economies are moral, are you? . . . and I don't mean moral "in theory," I mean with flesh and blood individual citizens.
So if there is a party buying up shit it's a pretext to just keep selling and producing that shit. I guess they call that moral hazard, and the market is offcourse always happy to squeeze every bit of morality out of the market.
Every time I hear or read something from these two gentlemen, I wish I could go back in age 30 years or so in order that I could take classes from them. This is probably the finest discussion yet on both Uncommon Knowledge as well as Fora.tv. Thank You, Fora.tv.
This side of the story is so rarely aired. I worked at a bank in 2000 that was making 2nd trust deed loans on homes up to 125% of the appraised value of the home. The CFO at the company told me that the loans were insane and no bank would ever make them. I asked why we were doing it and he said, "Because the government is buying them and backing them through FNMA and Freddie Mac." I said, "well were in the clear then if the government is backing them?" He said, "Not if the house of cards collapses. Then they will send the sheriff."
member. 
