I'm reading a very difficult book right now as research for a fantasy story I'm writing. It is not an easy book to read. It's not written like Michael Lewis, Big Short, or Too Big to Fail, or even Krugman's Depression Economics, all books of which I have read some, or all of in the last year. Those three all have a talky, jokey manner, exactly what you'd expect from a blog. I'm told that Malcom Gladwell writes like that too.
That's fine. Silver, Trade, and War, is written like a textbook, and so it is. The book isn't too hefty, but every sentence is packed and nearly incomprehensible. Not to mention that every other word is in Spanish, and is a reference to a medieval Spain. In brief, the book describes the Spanish economy in the late middle ages. Hence--the fantasy book.
Nonetheless, there are some interesting thoughts on the modern economy which it brings to mind. The first is as Niall Ferguson would have it, the bond markets have largely determined history for at least ten centuries of recorded time. Why? Bonds are how countries borrow money. Why do countries borrow money? Generally--to finance wars. Hence the prices of bonds are incredibly relevant to the entirety of modern history.
And that's exactly the point of what I've taken over three hundred words to get to. Free markets are unnatural and unlikely. This doesn't make the above curve useless, but it ought to limit its application, particularly among people like myself, and other arm chair economists who don't really know what they're talking about, i.e. the GOP caucus.
And so we are now, in a similar position. Frank Rich's Sunday Op-Ed pointed this out about our current fiscal crisis. Two years later, and the only financial industry type to swing, was Bernie Madoff, who had nothing to do with the crisis whatsoever, and was merely a symptom of the shortsightedness and greed of the financiers who have largely escaped unscathed, and certainly, unapologetic.