Friday, August 24, 2012

Richard Posner changes his mind on deregulation

Richard Posner, a well-respected federal judge, said Thursday on Current TV that he no longer believed the financial industry should not be regulated.
“I was an advocate of the deregulation movement and I made — along with other, a lot of smarter people — made a fundamental mistake, which is that deregulation works fine in industries which do not pervade the economy in their consequences,” he said. “The financial industry undergirds the entire economy and if it is made riskier by deregulation and collapses and widespread bankruptcies the entire economy freezes because it runs on credit.”
Posner, who was appointed to the 7th U.S. Circuit Court of Appeals by President Ronald Reagan, is associated with the conservative Chicago School of economics.
The Raw Story
Reagan-appointed judge: Deregulation advocates made a fundamental mistake
Eric W. Dolan

The first mea culpa?

3 comments:

Anonymous said...

... The entire economy freezes because it is run on credit ...

So when did he work this out? Thank goodness he has finally admitted what is completely obvious to everybody. Wish i could say better late than never.

Apj

paul said...

The entire economy freezes because it is run on credit

So, basically, the entire economy runs on batteries. Who knew?

I think this is the kind of thinking that reinforces misunderstanding of what creates motion in systems.

How do the batteries get charged?

apj, not necessarily disagreeing with you, just saying that the dynamics of credit aren't completely obvious.

reslez said...

Yet another conservative who recants as soon as his career no longer requires singing in tune with conservative orthodoxy.