20 Fools

clipped from www.davidwarrenonline.com The first foolish idea is that, given the black holes opened by the financial crisis, we should throw money into them. This is called, I believe, "the new Keynesianism." To be fair to the late Lord Keynes, who made at least one successful prediction ("in the long run we are all dead"), every Keynesianism has been a new Keynesianism, including the first. This is because politicians have invariably selected the easy part of his common-sensory proposals ("the government should spend when the economy falters"), while ignoring the hard part ("the government should save at all other times"). The second foolish idea is that, given the abject failure of national regulation to prevent financial institutions from giving bad loans, and leveraging themselves to perdition, we need vastly increased, international regulation. Where once the purpose of regulation was to assure the public that banks were solvent, it is now to assure the authorities that banks are doing good deeds.