I don't know how Richard Posner reads and writes as much as he does. But he does so much and does it so well.
Recently, Posner began another blog in addition to his original blog that he co-authors with Gary Becker. His latest blog, sponsored by The Atlantic, is called "A Failure of Capitalism", the same as the title of his book published this past spring by Harvard Press and about the financial crisis and the 2008ff recession in the United States.
In his most recent posting, Posner criticizes Paul Krugman's unabashed support for more gubmnt intervention in the market for health care, referring to Krugman as a "born again Keynesian". Posner's criticism is that the debate has created considerable uncertainty and that this uncertainty has caused people not only to save but to hoard liquidity, thus prolonging and deepening the recession. Let me add that this criticism applies to much of the Democrat and Obama agenda for increasing involvement of the gubmnt in the economy. Here is the conclusion from this posting:
Initially the concern was with the macroeconomic implications of adding some $100 billion a year to the federal deficit (an underestimate, in my view, because it ignores the increase in demand for medical services by tens of millions of persons who will have health insurance for the first time, which will reduce the marginal cost of medical services to them). The concern became so acute that focus shifted to measures for financing the program so that it would not add to the deficit. But when this happened, businesses and individuals alike began asking: what part of the cost of the new program will I bear? And this question injects a new and very major source of uncertainty into the economic environment. Small businessmen are worrying about the added cost to them if they are required to insure their employees, and individuals are wondering whether their cost of health insurance will rise. Most people do have health insurance and most of those who do are more or less satisfied with it; anyway better the devil you know than the devil you don't know.
Prudent businessmen and prudent individuals alike have thus been given an additional motive for hoarding cash rather than investing and consuming. No one knows how his financial situation will be affected by health reform, if it is is enacted. There is enormous and I think justified distrust of the government's ability to design and execute so ambitious a program as the Administration and the congressional leadership envisage.
One might think that this would give a born-again Keynesian macroeconomist like Paul Krugman pause. But not only does he say nothing about the effect of the debate over health reform on uncertainty and through it on the economic situation, even though he is pessimistic about the situation; he provides no analysis of the likely costs of health reform, and the incidence of those costs on particular groups in the society. He does nothing to allay the uncertainty that the debate over health reform has engendered.
My only concern about this particular blog is that it seems designed to plug his book. Not that I think his book shouldn't be plugged; in fact, I bought the book as soon as it was advertised.