转贴者按：美国著名经济法学家、联邦上诉法官波斯纳在华尔街日报上发表的这篇文章认为，美国资本主义经济制度尤其是金融制度发生严重危机，其主要原因在于美国政府从1970年代开始逐步放松对金融业的管制，美国中央银行----联储会在2000年代初期刻意降低利率，导致房产泡沫和次贷危机所致。作者还认为，资本主义经济制度天生具有不稳定性，由于金融业在整个经济运行过程中所处的核心地位，它的不稳定会导致整个经济停摆，从而发生严重经济危机，因此金融业必须受到政府的管制。
作者从这次危机中得出的三大教训是：一，联储会必须及早发现经济泡沫，及时采取措施挑破泡沫；二，政府必须管制金融业，以降低金融业天生的不稳定性；三，金融业还需要国际性管制。
总之，作者认为，导致经济危机的根本原因不在市场失灵，不在商人和民众的贪婪，而在政府。
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Capitalism in Crisis
It's hard to run a safe banking system when the central bank is recklessly easy.
By RICHARD A. POSNER
（MAY 7, 2009 Wall Street Journal）
The current economic crisis so far eclipses anything the American economy has undergone since the Great Depression that "recession" is too tepid a term to describe it. Its gravity is measured not by the unemployment rate but by the dizzying array of programs that the government is deploying and the staggering amounts of money that it is spending or pledging -- almost $13 trillion in loans, other investments and guarantees -- in an effort to avoid a repetition of the 1930s.
Much of this sum will not be spent (the guarantees), and probably most will eventually be recovered. But a commitment of such magnitude -- stacked on top of enormous budget deficits enlarged by sharply falling federal-tax revenues -- could lead to high inflation, greatly increased interest costs on a greatly increased national debt, much heavier taxes, the restructuring of major industries, and the redrawing of the line that separates business from government.
How did this happen? And what is to be done?
The key to understanding is that a capitalist economy, while immensely dynamic and productive, is not inherently stable. At its heart is a banking system that enables large-scale borrowing and lending, without which most businesses cannot bridge the gap between incurring costs and receiving revenues and most consumers cannot achieve their desired level of consumption. When the banking system breaks down and credit consequently seizes up, economic activity plummets.
Lending borrowed capital -- the essence of banking -- is risky. That risk is amplified when interest rates are very low, as they were in the early 2000s because of a mistaken decision made by the Federal Reserve under Alan Greenspan to force interest rates down and keep them down. Because houses are bought with debt (for example, an 80% first mortgage on a house), low interest rates spur demand for houses. And because the housing stock is so durable a surge in demand increases not only housing starts but also the prices of existing houses. When people saw house prices rising -- and were assured by officials and other experts that they were rising because of favorable "fundamentals" -- Americans decided that houses were a great investment, and so demand and prices kept on rising.
In fact, prices were rising because interest rates were low. So when the Federal Reserve (fearing inflation) began pushing interest rates up in 2005, the bubble began leaking air and eventually burst. It carried the banking industry down with it because banks were so heavily invested in financing houses.
The banking crash might not have occurred had banking not been progressively deregulated beginning in the 1970s. Before deregulation banks were forbidden to pay interest on demand deposits. This gave them a cheap source of capital, which enabled them to make money even on low-risk short-term loans. Competition between banks was discouraged by limits on the issuance of bank charters and by (in some states) not permitting banks to establish branch offices. And nonbank finance companies (such as broker-dealers, money-market funds and hedge funds) did not offer close substitutes for regulated banking services.
Those days are gone. Had Americans' savings not become concentrated in houses and common stocks, the banking meltdown would have had less effect on the general economy. When these assets -- their prices artificially inflated by low interest rates -- fell in value, credit tightened and people felt (and were!) poorer. So people reduced their spending and allocated more of their income to precautionary savings, including cash, government securities and money-market accounts.
The Fed tried to encourage lending by once again pushing interest rates way down. But the banks -- their capital depleted by the fall in value of their mortgage-related assets -- have hoarded most of the cash they've received as a result of being able to borrow cheaply, rather than risk lending into a depression. Their hoarding, like that of consumers, is entirely rational, but it inhibits investment as well as consumption.
With easy money failing to do the trick, the government began lending large sums of money directly to banks. It also tried to bypass the banks in its efforts to stimulate consumption and employment by implementing tax cuts, benefits increases and public-works projects hard hit by unemployment. Though the banks are continuing to hoard bailout money and the stimulus program is just beginning to be implemented, these and other recovery programs have probably slowed the downward spiral.
It's not too soon, therefore, to derive some important lessons from the economic crisis:
First, businessmen seek to maximize profits within a framework established by government. We want businessmen to discover what people want to buy and to supply that demand as cheaply as possible. This generates profits that signal competitors to enter the market until excess profit is eliminated and resources are allocated most efficiently. Financial products are an important class of products that we want provided competitively. But because risk and return are positively correlated in finance, competition in an unregulated financial market drives up risk, which, given the centrality of banking to a capitalist economy, can produce an economic calamity. Rational businessmen will accept a risk of bankruptcy if profits are high because then the expected cost of reducing that risk also is high. Given limited liability, bankruptcy is not the end of the world for shareholders or managers. But a wave of bank bankruptcies can bring down the economy. The risk of that happening is external to banks' decision-making and to control it we need government. Specifically we need our central bank, the Federal Reserve, to be on the lookout for bubbles, especially housing bubbles because of the deep entanglement of the banking industry with the housing industry. Our central bank failed us.
The second lesson is that we may need more regulation of banking to reduce its inherent riskiness. But now is not the time for that: There is no danger of a renewed housing or credit bubble in the immediate future. The essential task now is to recover from the depression. That requires, as John Maynard Keynes taught, a restoration of business confidence. Investment is inherently uncertain, and it is even more uncertain in a depression. Anything that amplifies this uncertainty slows recovery by making businessmen more likely to freeze and hoard rather than venture and spend. Reregulating banking, hauling bankers before congressional committees, passing laws tightening credit-card lending, and capping bonuses all impede recovery. All that is for later, once the economy is back on track. For now such measures are just distractions.
Moreover, it is unclear how banking should be regulated. Banking in the broad sense of financial intermediation (borrowing capital in order to lend or otherwise invest it) is immensely diverse. It is also international. If one nation reduces the riskiness of its banking industry, business will flow to other nations, just as a bank that decides to be cautious will lose investors to its competitors because of the positive correlation of risk and return. So international regulation of banking is needed in principle, but international regulation tends to be lowest-common-denominator regulation and so may be ineffectual.
Finally, let's place the blame where it belongs. Not on the bankers, who are not responsible for assuring economic stability, but on the government officials who had that responsibility and failed to discharge it. They failed even to develop contingency plans to deal with what everyone knew could happen in a context of escalating housing prices (it had happened in Japan in the late 1980s and the 1990s). Lacking such plans, the government responded to the crisis with spasmodic improvisations, amplifying uncertainty and mistrust and thus retarding recovery.
And let's not forget to apportion some of the blame to the influential economists who assured us that there could never be another depression. They argued that in the face of a recession the Federal Reserve had only to reduce interest rates and flood the banks with money and all would be well. If only.
Mr. Posner is a federal circuit judge and a senior lecturer at the University of Chicago Law School. He is the author of the just-published "A Failure of Capitalism: The Crisis of '08 and the Descent into Depression" (Harvard University Press).
