Creeping Doubts

From Monday's NYTimes economic reporter Patricia Cohen: "The economic conventions that policymakers had relied on since the Berlin Wall fell more than 30 years ago — the unfailing superiority of open markets, liberalized trade and maximum efficiency — look to be running off the rails... increasing bouts of extreme weather that destroyed crops, forced migrations and halted power plants has illustrated that the market’s invisible hand was not protecting the planet." This from Today's Times on Repubican shifting attitudes on laissez faire: “We really like capitalism, but we recognize it’s not working right now,” said Oren Cass, a former aide to Mitt Romney and the executive director of American Compass, a think tank that published the manifesto. What's not to like? Minor glitch here oe there, you don't want to throw out the baby. But then the question must be asked: what is to be done? Unfailingly, the answer is reform. A bit of charitable redistribution perhaps. Maybe a carbon tax. What if business started treating their employess with more respect? A tweak here and there and we should be able to produce a somewhat kinder, gentler capitalism, right? And who might we call for new ideas? Why,Economists.Grad schools crank them out by the train load. Surely they can figure out how to get all those markets; labor, finance, commodities, currency, housing, etc...all "working" smoothly again. Surely they can apply all that training. Surely. I mean, c'mon. A week later, this in the Times about the brilliance of some hot-shot financier: “The capitalist system does not work if you don’t price the externalities,” Litterman said. Hence a government-set price for carbon emissions. Hence...