Somebody in Charge

PIERRE LEMIEUX is a Research Fellow at The Independent Institute, Professor of Economics at the Université du Québec en Outaouais (Canada), and co-chairman of the GREL (Groupe de Recherche Économie et Liberté).

• Introduction: Adult Supervision PART I: THE LIMITS OF AUTHORITY Social Complexity The Impossibility of Planning The Inconvenient Individual The Tribe and the Great Society PART II: ARE RECESSIONS POSSIBLE?   Business Cycles and Crashes An Economist in Wonderland Classical Economics Recessions Happen  PART III: MACROECONOMIC CONTROVERSIES The Old Idea of Underconsumption Keynes's Ideas: A Brief Summary Price Adjustments Multiplying Bread and Fish Meaningless Aggregates Information and Coordination Government Activism More Recent Theories of the Business Cycle PART IV: THE MIXED ECONOMY A Failure of Capitalism?  Government Revenues and Expenditures Regulation and Control The Welfare State Businessmen as Domestic Animals PART V: FINANCIAL DEREGULATION: AN URBAN LEGEND Lax Regulation Deregulation U.S. Banks in a World Perspective Necessary Regulation?  PART VI: THE CRIME SCENE: ENVY OF THE WORLD Residential Home Market Driven by Government A Half-nationalized Residential Mortgage Market Securitization Subsidization of Risk The Collapse of the House of Cards Larger Consequences PART VII: MONETARY MEDDLING The Austrian Theory of the Business Cycle Some Doubts on the Austrian Interpretation of the Crisis Monetary Policy Played a Role On Balance: A Contributing Factor PART VIII: STATE ANIMAL SPIRITS State Greed Faddish Behavior and State Bubbles Regulatory failure Collectivism Power and Hubris Systemic risk Conclusion: Something Must Be Done Bibliography Name Index Topics Index Charts

"Lemieux argues that the government's clumsy and ill-considered attempts to control market outcomes have often been at the heart of economic instability, and that the recent subprime crisis is a telling example of the costs of risky interventionism into the financial system. People who find that argument surprising may be even more surprised by how much their horizons will be broadened by reading this book." - Charles Calomiris, Henry Kaufman Professor of Financial Institutions, Columbia University Graduate School of Business "Most people think that the recent financial crisis is attributable to greedy bankers and low interest rates. The scientific literature suggests otherwise. I have worked on this issue, and read much about the argument (the work of Levine or Rajan to name a few), but I never saw it so eloquently put than by Pierre Lemieux in his "Somebody in Charge". It is a delight to go pages after pages and see how brilliantly the author demonstrates the deep involvement of the government in the making-of of this tragedy. Any reader would benefit tremendously from this reading, opening our eyes on the possibility that "the authorities" is just a mental creation of our mind trying to escape the naked truth : there is no such a thing as a mechanistic, manageable, and predictable society. Society is a matter of Nature." - Christian Calmes, Professor of Economics and Finance, Universite du Quebec en Outaouais Administrative Science Department "Far too many works about the recent financial crisis either turn on anecdotal personal accounts with sensationalistic and exaggerated finger pointing or are hopelessly enmeshed in highly technical financial details and economic theories. Nearly all perpetuate the widespread myth that the crisis resulted from some giant market failure. Pierre Lemieux's SOMEBODY IN CHARGE systematically and convincingly demolishes that myth. In doing so, he offers not only a readable survey of the myriad government regulations, interventions, and institutions that hobbled the market economy before the crisis and brought on that calamity, but also an accessible and insightful introduction to recent financial innovations and alternative economic theories." - Jeffrey Rogers Hummel, Department of Economics, San Jose State University