The Washington Post's Ezra Klein and Neil Irwin of WonkBlog discuss central banking policy after the financial crisis and the opposing views about its role in the state of the economy. – The Washington Post
Dominant Social Theme: Nothing is wrong with what we have now.
Free-Market Analysis: We must make a confession: We didn't read David Stockman's article in the New York Times until recently … but, boy, we sure should have!
This video, which is a response to Stockman's screed, is probably the most inchoate and disorganized single presentation we've seen in a long time. At one point, Irwin actually says that the reason people have an affinity for gold is because it makes them feel closer to "nature."
And Ezra Klein is all but tongue-tied. He keeps making statements about how economies – and economic practices – are not "fair"… and Irwin keeps agreeing with him. Klein is obviously making Keynesian arguments but he certainly doesn't make them well. Irwin's statements are just plain flaky.
The overwhelming impression is of two people who are trying to rebut a cohesive and logical brief and have almost no idea of how to do it. The various rebuttals they do offer are strained and to an educated ear are laughable. See for yourself:
They criticize Stockman for what they consider to be a moralistic tone to some of his anti-central bank arguments.
But if one watches the video and reads what Stockman wrote, it will become clear that Stockman is far more knowledgeable and rational about the topic (and so he should be given his specialty in this area) than these two.
Of course, Stockman gets some of it wrong, as well. He leads up to it, but cannot quite bring himself to say that monopoly central banking is useless.
However, progress is progress. That he was able to publish such a screed in The New York Times only confirms our perspective that the current model is doomed. Ben Bernanke may not be the last modern central banker but he is probably one of a dying breed.
Who knows what will come in its place? As we have pointed out before, with the European recession deepening, with Britain heading into a third slump, with the US – despite various statements otherwise – still mired in its own Great Recession, the credibility of those who have organized the world's current systems is at an all-time low.
The last time this happened was during the Great Depression. Then the Great Powers ended up at war, but a worldwide war is probably an impossibility given the number of atomic weapons rattling around.
It is very possible that the system simply cannot be stabilized and will descend – willy, nilly – into various solutions, perhaps competitive ones and including some form of market oriented metals standard.
If you want to see the terrible state to which apologists for central banking have descended in this Brave New Era, watch this video.