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What Billy Mitchell said


There is no monopoly on wasteful, corrupt and profligate spending in the public sector. The recent crisis has taught us very well how poorly private markets allocate resources.

Indeed. I mean, we're building new houses in Vegas -- You can even get stucco! Oh, boy, can you get stucco! -- when the houses built in the last bubble are still vacant. Surely there's something better we could be doing with those resources? From where I sit, the same insane kleptocratic rentiers who inflated the last bubble, and put us on the hook for the trillions they lost when it burst, is busily inflating a new one, for which we will pay again. Ably assisted in their rent collection, of course, by the legacy parties, who have ratified the looting and thievery of the last round by granting the CEOs perps impunity, as if this were some kind of banana republic.* "Free market," my sweet Aunt Fanny.

Anyhow, read all of Mitchell.

I'm not going to summarize it because I don't feel my analytical tools are sharp enough to do the post justice. It starts out pretty dry with an overview of the sadism of German neo-liberalism ("discipline!"), but then includes this nugget on the bond market:

The point is that it is always assumed by mainstream macroeconomists who now operate within the neo-liberal tradition that the bond markets are the ultimate constraint on government net spending. The constraint is, of-course, voluntary. Sovereign governments could operate free of this constraint whenever they like subject to legislative or regulation reforms.

So Clinton operative Carville's famous statement is doubly wrong:

I used to think that if there was reincarnation, I wanted to come back as the president or the pope or as a .400 baseball hitter. But now I would like to come back as the bond market. You can intimidate everybody.

First, assuming Carville's statement to be without irony, it's amazing that somebody operating at Carville's high level wouldn't know who owns him and his class. The obfuscation must be very, very great, all the way to the top of the tree.

Second, as Mitchell points out, the constraint is self-imposed. The constraint is only there in Carville's mind -- or, more precisely, his ideology.

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