Obama's Chief Economic Advisor: Milton Friedman, deregulation good

Per Ezra Klein, we learn that Larry Summers has said this:

As for [Milton] Friedman -- I'm not so sure he looks bad. What is most screwed up today? GSEs, Citibank, regional banks. What is most regulated? Same list. What is least screwed up? Hedge funds and the like. What is least regulated? If regulation means the jihad against short selling that the Securities and Exchange Commission is engaged in, then god help us all.

The only reason "regulated" banks are the "most screwed up" now is because the "unregulated" investment banks are "gone." And as for hedge funds:

The hedge fund industry has been hit hard by the worst global financial and economic crisis in decades.

...[A]ssets under management in the global hedge fund industry declined to $1.56 trillion at the end of October, a level last seen at the end of the fourth quarter of 2006.

"There are a lot managers that are going out of business that have underlying positions that are profitable" because they can't get the financing as a result of the credit crisis, Webster said.

This is the man who has Obama's ear on economic policy.

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We have to keep hammering on this theme

because I believe Obama will be at his wit's end in 18 months or so, trying to deal with the economic collapse.

I think this should go on DailyKos, along with some facts about hedge funds, and how little they do for real economic activity. Has anyone done a study to see if hedge funds actually contribute to raising funds for capital expenditures? I would like to see capital expenditures as percent of GDP figures (I did that back in the 1990s, when I was getting paid for such things) and the downshift from the 1960s was very clear.

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The one hope I have left

Is the chance of Al Franken getting a Senate seat. I'm hoping that will be enough common sense fair traders in the Senate to at least put some reign on this nonsense from the Executive Office.

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Maximum jobs, not maximum profits.

What I'm hoping

is for the time that Naomi Klein identifies in Shock Doctrine - when the politically impossible becomes the politically probable. On fundamentally altering our economic and financial arrangements, I think we are at the beginning of such a time. There are many, many people who never much thought about these issues up until a year or so ago - now look how many econ-fin diaries are on DailyKos each day. Our problem is that we are hopelessly out-organized by the wrong-wing machine, which as billionaires and millionaires financing it. So there are a number of people who can make careers - and make quite decent salaries - dreaming up complete bullshit like the CRA, Freddie, and Fannie being to root cause of today's financial crash.

I wish I could spend all day researching and writing. I simply cannot afford to.

But what I think is going to happen is that at some point in the next year or two, progressives are going to realize that Obama and his team do NOT really have progressive economic beliefs. To be more accurate, they will come to realize that the economic and monetary policies chosen by Obama and his team are really not working to reverse the long term economic decline of the United States - and all the regional, local, and individual misery that decline entails. It is at that point that Americans choose between going the way we are pointing to - or going the way of Germany in the 1930s.

Right now, I would not be taking bets on which way the U.S> will go. I think it could go either way. Which is why we need to keep hammering away.

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eco-fin?

Really? That's a good change if true. Tell 'em about EP, we're all econ, 24/7.

Well, I think getting the nation back is a matter of stopping the influence buying the massive campaigns and their costs, the revolving door and most of all, stopping those corporate lobbyists with their wads of smelly cash.

If you get that out of our government we might stand a chance for the system to work.

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Hedge funds are not screwed up?

Well, well, what was that about ethics in Economists? They have lost billions, many are deemed to go bankrupt and to note that Obama has an agenda to make zero capital gains on "startups". Obviously every hedge fund and their brother will reinvent themselves as a "startup" to get that deal.

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They can deregulate all they want

Just stop with the taxpayer bailouts! If they want to run their businesses into the ground and screw the investors, so be it. Just let the people pay the price for incompetence instead of running to Mother Taxpayer every time.

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