Naked Capitalism Link of the Day

Today's link: Inside George Soros' "Monstrous Monkey House," by John Cassidy, which reviews the speakers at the Institute for New Economic Thinking Conference hosted last weekend at the Mount Washington Hotel in Bretton Woods, New Hampshire.


Mount Washington Hotel

 From the post:

The conference ran throughout Sunday. It ended with the F.T.’s Gillian Tett interviewing Soros and Paul Volcker, the former Fed chairman. Fittingly enough, Volcker turned to the issue of international-monetary reform, which hitherto hadn’t featured much in the conference despite its location. He recalled joining the Treasury in 1969 as under secretary for monetary affairs at a time when the original Bretton Woods system was still operating but running into problems. Today, he noted, there wasn’t any formal international system but rather a de facto arrangement characterized by a lack of fiscal discipline and huge current account imbalances. “Who would ever sit down and think of designing a system that permitted China to get three trillion dollars worth of reserves, and for the U.S. to happily use all that money to run up housing prices?” Volcker said. “I think there really was a connection between the international monetary system … and the great financial crisis. And nobody has had any interest” in reforming it.

And that, pretty much, was that—save for a not-too-subtle putdown by Volcker of his successor, Alan Greenspan, which in itself was worth the journey to New Hampshire. Asked by Tett to comment on Greenspan’s recent article in the F.T., in which he said financial reform was basically pointless, Volcker said: “On the face of it, without referring to Alan Greenspan, I can simply say I think the markets needed more regulation and the banks needed more regulation.”
Note about the headline: It’s another quote from Keynes, who was originally reluctant to attend the Bretton Woods conference, to which more than seven hundred delegates from forty-four countries had been invited. Keynes (wrongly) feared that nothing would get done and the result would be a “monstrous monkey house.”

I would opine that the nation would be better off if Reagan had reappointed Volcker and not replaced him with Alan Greenspan.  The post features a lot of other people, such as Larry Summers and Gordon Brown claiming they weren't responsible for the meltdown, and had seen the problems building.  I don't buy it.