Too Big To Fail: The First 5000 Years — Crooked Timber

26 Feb

This is from the ‘middle’ (I suspect) of an ongoing conversation which I don’t have time to (even attempt to) summarize. But the suggestion is that it’s Jubilee time for all. That is, if the Powers That Be had any sense, which they don’t:

Well, no firm in any business can make a big profit if there is too much supply. Globally there is US$40 to $60 trillion zapping around, fast as electrons, looking for big yields.

Now they are running out of bubbles to blow up, while their yields in the safe sovereign harbors are negative, or almost negative.

The correct solution is redistribution, jubilee. But in today’s terms: let’s have higher fiscal deficits in the short-term to boost infrastructure and human capital (a.k.a. “education”), to get the economy moving again. Then afterward, let’s have a series of slow and progressive tax hikes to pay down deficits until the safety-net programs are long-term robust—which is also, incidentally or double coincidentally, a fiscal policy to reduce inflation from the wage side, and thus also to keep interest rates in check. And perhaps include a charter for a small-business investment bank, perhaps the only one with government deposit insurance.

via Too Big To Fail: The First 5000 Years — Crooked Timber.

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