The Market Mystique

I'm ridiculously busy these days, so I fear all I've got to offer tonight is a link to Dr. Krugman in Friday's NYTimes. And in case you think you can't be bothered to click over to his remembrances of the wondrous days when banks enticed you with free toasters (and that was considered enough), here's his open:

On Monday, Lawrence Summers, the head of the National Economic Council, responded to criticisms of the Obama administration's plan to subsidize private purchases of toxic assets. "I don't know of any economist," he declared, "who doesn't believe that better functioning capital markets in which assets can be traded are a good idea."

Leave aside for a moment the question of whether a market in which buyers have to be bribed to participate can really be described as "better functioning." Even so, Mr. Summers needs to get out more. Quite a few economists have reconsidered their favorable opinion of capital markets and asset trading in the light of the current crisis.

But it has become increasingly clear over the past few days that top officials in the Obama administration are still in the grip of the market mystique. They still believe in the magic of the financial marketplace and in the prowess of the wizards who perform that magic.

Now go and click.