The Chicago School is Back

by Wayne Spencer - March 9, 2009

Well, the Chicago School of macroeconomics is busy picking itself up off the floor after causing the greatest financial crisis since the great depression.

I really thought that these so-called macroeconomists were out for good after their chief spokesperson Alan Greenspan admitted before Congress last year that he had been wrong for forty years.

This group is not shy and is not ashamed for the mess that they caused. Armed with financial support from the wealthiest groups in the world, they are again making their presence known. They are saying that what we need is a government hands off policy. What they mean is hands off as far as helping spur demand, relieving suffering of the poor and middle class and no healthcare system.

According to them more tax cuts, more government aid to business and banks are all that is needed to get the country's economy going again. In other words: Obama shouldn't be giving government funds to the undeserved masses where it might get diluted. Instead give it to the fewer wealthy who will treat the money with more respect and will protect these funds from getting into the hands of people who might not keep it to themselves but who might actually "spend" it.

Myself, I do not understand how the very policies that got us into this mess are the same policies that will get us out. It's not logical and it will not work. It will just dig a deeper hole.

I am very concerned that the voices of those who could help us get out of this financial mess in a shorter period of time are being drowned out by these well financed radicals.

My present view is that the Treasury should stop bailing out the financial institutions and let the Federal Reserve deal with it. The Fed together with the FDIC have the tools necessary to provide liquidity.

What is needed from the Federal Treasury is a far greater stimulus package than the one passed by Congress. The problem of getting money into the hands of workers is paramount. The problem is demand more than liquidity.

All foreclosures should be immediately stopped. They are counter-productive for the economy, our social fabric and the banks themselves.

Obama's fiscal stimulus is a step in the right direction. Most economists agree that it should be two to three time as large as what has already passed. A single-payer healthcare system would also help the economy both now and in the future. Healthcare cost burdens on industry has been a prime reason for our loss of jobs to foreign countries.

-Wayne

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Copyright © 2009 by Wayne Spencer - This article may be freely distributed in its entirety with this copyright notice attached.