By Arnold Kling
Not atypically, I start the morning with links from the indispensable Mark Thoma.
1. Steven Randy Waldman waxes Austro-Keynesian. Read the whole thing. His peroration:
It is not technocratic economists who will win the day and pull us out of our cul-de-sac, but angry Irishmen and Spaniards who challenge, on moral terms, the right of German bankers to impose vast deadweight costs on current activity because they lent greedily into what might easily have been recognized as a property and credit bubble.
Predicting the outcome of a contest between technocratic economists and angry citizens is difficult. That is why Simon Johnson has to hedge his bets on the outcome of the euro crisis.
More financial firms — with none too big to fail — would mean less concentrated financial power, less concentrated risk and better access and service for American businesses and the public. Even if they were substantially smaller, the largest firms could continue to meet any global financial demand either directly or through syndication.
Sounds like the head of the Federal Reserve Bank of Kansas City wants to Break up the Banks.