The Failure of Capitalism?
If you remember, The Failure of Capitalism is the title of Judge Richard Posner’s most recent book. George Mason University’s Russ Roberts has a very interesting podcast with Posner in which they talk about what caused the economic crisis.
Listen to this conversation and decide for yourself if Posner manages to make a good case for his theory. I think he ignores important factors, such as government-created moral hazards, which leads him to lump together several types of regulatory failures that shouldn’t be lumped together. To be fair, Posner places most of the blame for the crisis on the Federal Reserve, inattentive regulators, and the subsidization of risk. And yet, he supported federal intervention in the economy in the name of recovery.
Russ Roberts’s interview and responses to Posner are superb as always.