Monday, September 7, 2009

Robert Lenzner and Judge Richard Posner Argue for International Socialism

I responded to a Forbes article by Robert Lenzner in which Lenzner quotes Judge Posner in arguing that subsidies to large, incompetently run Wall Street firms that produce no value are essential because otherwise benefits to Posner's employers, the University of Chicago and the federal court system, will slow to a trickle.

Posner has made a career arguing that the judicial system optimizes social welfare. In Posner's view, the United States is wealthy because of judges and academics, not because of the innovation of the free market. In his view, all that is needed to become wealthy is further government control and centralization.

The difference between Posner and Stalin is this: whereas Posner, like Trotsky, argues for international socialism, Stalin argued for socialism in one country.

My response to Lenser follows:

Judge Posner's theory that he is smarter than the dynamic of markets is in a long tradition of advocacy of centralized economic planning that goes back to the days of the Emperor Diocletian. Posner's ideas worked so well in the Soviet Union and Cuba that he aims to transplant them here. The difference is that in the Soviet Union the spoils of socialism went to armed thugs, whereas in the USA Posner aims to distribute them to donors to the University of Chicago and his clients in the federal court system.

Posner's ideas do not work. The court system has done nothing to make the economy more rational. Rather, it has redistributed wealth to the wealthy. Now, Posner aims to extend his failed utilitarian strategy by subsidizing incompetently run Wall Street firms which have been cancer in the lungs of the American economy for a century.

The idea that Bear Stearns needed help from me is like saying that my grandfather's pneumonia ought to have been encouraged by his physician.

If Wall Street created value it would not need subsidies. If it created value, we would not need to transfer massive amounts of wealth to it annually via the Federal Reserve Bank's monetary expansion. Wall Street steals from the productive sector of the economy and donates it to the unproductive, say universities and the court system.

In the 19th century the American economy was relatively decentralized, there was no Fed, the courts had less power, and the real hourly wage increased two percent per year. In the 20th century we have increasing power arrogated to a self-serving federal court system and Wall Street, and real wages are increasing 2% per 25 years.

Posner, Lensner and the rest of the "oh dear Wall Street needs a trillion dollars of your money or the sky will fall" corrupt nexus of mass media, courts and academia should move to Cuba, that benign island nation off the shore of Florida where Posner's ideas flourish.


Anonymous said...

You've got to be kidding.

Mitchell Langbert said...

You mean kidding that Posner and Lenzner and the rest of the corrupt establishment think that Wall Street contributes anything of value to the American economy? Sadly not. Lenzner's and Posner's Alice-in-Wonderland belief that Wall Street does anything but suck value out of the economy is characteristic of the American propaganda outlets that are always responsive to Wall Street's interests. As incompetent as Wall Street is with respect to turning a profit, they are good at political manipulation and the exercise of power through the media. Sad but true. I kid you not.