In response to an FT article by Larry Summers on 7th February 2016, entitled 'No free lunches but plenty of cheap ones'
"Yet I am increasingly convinced that “no free lunch” oversimplifies matters and makes economics too dismal a science"
This must have been a recent conversion. You've been intimately involved in several prominent examples of culinary largesse:
1. The Commodity Futures Modernization Act was kicked off in 1998, and enacted in 2000 by a lame duck Congress. It gave free license to financial derivatives, and was supported and steered through by three of the finest free lunch chefs of the age - Alan Greenspan, Robert Rubin and none other than Professor Summers. The dish was cooked up despite attempts by Brooksley Born, Chairman of the CFTC to retain regulatory control...'not necessary' says Washington's answer to Gordon Ramsey and his two pals - strike one, free lunch for Wall Street
2. Repeal of Glass-Steagall in 1999 - another sumptuous dish, which enabled the casinos to hitch their wagon to retail banks, helping to put the taxpayer on the line for 'Too Big To Fail'. Many commentators say this had little to do with the GFC because the majority of the mortgage lenders were not banks. This is called the 'nothing to do with me guv' defence which, given the banks packaged them up and sold them on, is about as convincing as a 'fence' pleading not guilty because he wasn't the guy who burgled the house - strike two - another free lunch for Wall Street
3. Not content on dishing up free lunches, Professor Summers also has 'previous' in deriding people who point out that someone pays for them. Raghuram Rajan, one of the few Central Bankers who understands how an economy actually works was publicly ridiculed as a 'luddite' by Professor Summers in 2005...for daring to challenge the egos of the tired old men around him with warnings of increasing financial instability - strike three - another win for anyone who didn't have to bail out the banks - that would be the banks wouldn't it?
There is no such thing as a free lunch Professor Summers. There are always consequences; you're just not very good at working out what they are likely to be. You are, however, brilliant at aligning yourself with the guys who don't pick up the tab.
Economics isn't a 'dismal science'. Firstly, it isn't a science, and secondly there is nothing dismal about it. What is dismal are the ethical standards of the charlatans on Wall Street, the shady dealings of their enablers in Washington, and the increasingly transparent hubris of the academics and 'useful fools' who give so-called intellectual credibility to a system that is rotten to the core.