Felix Salmon has posted the video of the entire interview, in which Summers denies having anything to do with the deregulation of markets during the Clinton administration and Krishnan Guru-Murthy pushes him in a way few if any interviewers ever have.

Here’s the link to the text of the booklet published with the same title (and a link to images of the original publication).

WAR is a racket. It always has been.

It is possibly the oldest, easily the most profitable, surely the most vicious. It is the only one international in scope. It is the only one in which the profits are reckoned in dollars and the losses in lives.

A racket is best described, I believe, as something that is not what it seems to the majority of the people. Only a small “inside” group knows what it is about. It is conducted for the benefit of the very few, at the expense of the very many. Out of war a few people make huge fortunes.

In the World War [I] a mere handful garnered the profits of the conflict. At least 21,000 new millionaires and billionaires were made in the United States during the World War. That many admitted their huge blood gains in their income tax returns. How many other war millionaires falsified their tax returns no one knows.

By the same token, isn’t the current economic crisis also a racket? If so, who is the Major General Smedley Butler of our time?

Simon Wren-Lewis waxes nostalgic for the days before things fell apart, when macroeconomists agree on the framework of analysis.

He provides a good summary of what it looked like before:

Goodfriend and King coined the term ‘New Neoclassical Synthesis’ (call it ‘synthesis’ for short), and other authors wrote along similar lines. So, even as recently as five years ago, I told masters students starting a macro course to forget anything they might have been told about alternative schools of thought: they were going to learn a unified framework that most macroeconomists – the mainstream – would sign up to. It was like the first half of David Romer’s popular textbook: start with Solow, but quickly replace a fixed savings propensity by an optimising intertemporal consumer to get the basic Ramsey model. Add endogenous labour supply to get RBC. Probably talk a bit about overlapping generations. Hopefully add to what was in Romer by doing some open economy stuff. Then add New Keynesian theory built around sticky prices. If the student went on to work in a central bank, they would probably encounter this framework as a central part of that institution’s forecasting and policy analysis.

Now, in the midst of the Second Great Depression, Wren-Lewis laments the fact that the consensus has fallen apart and we’re back to contending schools of thought.

The problem Wren-Lewis misses is the fact that the range of discussion within the mainstream—the synthesis then and the contending perspectives now—has narrowly limited the theoretical perspectives and policy options within the macroeconomic debate. It’s why mainstream economists didn’t admit of the possibility of capitalists crises before and why they can’t figure out what to do now.

My sense is the debate won’t improve until things really do fall apart within macroeconomics.

Occupying the World Economic Forum in Davos, while CEOs defend capitalism.

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Who cares about the rules governing CEO compensation during bankruptcy?

Both MSNBC [ht: ja] and the Wall Street Journal are now documenting the fact that corporations are finding ways around congressional regulations governing compensation to Chief Executive Officers during bankruptcy proceedings.

Under Chapter 11, corporations are able to close offices and factories, cut jobs, and wipe out shareholders. But they’re finding ways of offering generous compensation to the CEOs who preside over the reorganizations.

From the Journal:

By examining court documents and regulatory filings, The Wall Street Journal was able to determine the pay of executives at 21 of the 100 largest companies that recently went through bankruptcy. Together, the chief executives of those firms earned more than $350 million in salary, bonuses, stock grants and severance for the periods their companies were under Chapter 11 bankruptcy protection or just afterward.

Of the 21 chief executives, seven had either been hired during a bankruptcy case or been with a company less than a year before its Chapter 11 filing. Some of the 21 CEOs, including Lear’s, received bigger bonuses during bankruptcy protection than in previous years.

And from MSNBC:

“There seems to be no sense of accountability at this level,” said Steven Kropp, a professor at Roger Williams University School of Law. “In most of these cases, the unsecured creditors aren’t being paid back in full, employees are being laid off, and in addition, they’re finding their health insurance and pensions diminished.”

Clearly, under contemporary capitalism, CEOs are finding new and ingenious ways of bankrupting the bankrupters.

Economics experts, with few exceptions, continue to hold to their view that it’s not capitalism but, instead, “technological change” that explains rising income inequality in the United States.

That’s the conclusion of the latest survey by the Initiative on Global Markets at the University of Chicago’s Booth School of Business. (The votes of the “experts,” along with their levels of confidence, are reported on the same page.)

The only dissenting votes were by William Nordhaus (“Although this is a common view, the causal factors are too complex to untangle unambiguously.”) and James Stock (for reasons presumably explained in the book, The race between education and technology).

A few other “uncertain” votes might also be interpreted as disagreements. But it’s still the case that, for most mainstream economists, changes in technology—and not the particular forms of capitalism—are the ultimate explanation of widening inequalities in the distribution of income in the United States.

Why is this important? Because, first, it attributes inequality to an exogenous factor, technology, over which there is no control (because that’s how technological change is understood within neoclassical economics, as something that happens outside the economy and society). And, second, it reflects the fact that everyone gets what they deserve (since those at the top have the skills to match the better technology, which is reflected in their higher pay, while those at the bottom lose out, which just corresponds to their lower skills).

What this means, in terms of policy, is the best that can be done is to encourage more education (to develop skills appropriate to the new technologies), and perhaps ameliorate the worst effects of inequality (via taxes and spending on social programs).

In other words, the view of mainstream economist is that we just have to adopt to the changing technology—and give up on the idea of eliminating capitalism.

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The proliferating scandals and enormous sums of money involved in intercollegiate athletics prompt the question: is it slavery or capitalism?

We should remember that, for a long time, professional baseball was organized as slavery—until the advent of free agency and the rise of capitalist baseball. And, according to Taylor Branch, intercollegiate athletics right now have the “unmistakable whiff of the plantation.”

So, which is it—capitalism or slavery?

The slavery analogy is reinforced by Joe Nocera’s recent series of columns (e.g., here, here, and here) on the arbitrary and capricious use of power by the N.C.A.A. over student-athletes.

But then there is the business of big-time sports, as explained by Judith Scott-Clayton.

While there can be quite a bit of arbitrariness in the accounting underlying these reports, it seems clear that at least some institutions are making money: among the 120 colleges in the Football Bowl Subdivision (F.B.S., formerly called Division I-A), about 25 percent generated $14.4 million or more in net revenues annually from their men’s athletic programs.

And then there’s the political support, leverage with other powerful people, and free advertising to students and parents that big-time sports universities obtain through television exposure and the use of luxury boxes.

Clearly, at least some (but certainly not all) colleges and universities make big-time money through intercollegiate athletics while treating the athletes themselves as plantation workers, with few rights or forms of redress.

Capitalist business practices and slave labor. Perhaps that combination is the closest we’ll get to an answer.

Jonathan Portes explains that the current depression in Britain is now—when measured in terms of the time period during which output remains below its previous peak—”longer than that experienced during the Great Depression, and is not likely to end any time soon.”

Or, as we say on this side of the Atlantic, how’s that expansionary-austerity thing workin’ out for ya?

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