More Brooks v. Krugman

Davidf Brooks comes out swinging against liberal technocrats.  He doesn't name Paul Krugman, but he could have!

Many of the psychologists, artists and moral philosophers I know are liberal, so it seems strange that American liberalism should adopt an economic philosophy that excludes psychology, emotion and morality.

Yet that is what has happened. The economic approach embraced by the most prominent liberals over the past few years is mostly mechanical. The economy is treated like a big machine; the people in it like rational, utility maximizing cogs. The performance of the economic machine can be predicted with quantitative macroeconomic models.

These models can be used to make highly specific projections. If the government borrows $1 and then spends it, it will produce $1.50 worth of economic activity. If the government spends $800 billion on a stimulus package, that will produce 3.5 million in new jobs.

Everything is rigorous. Everything is science.

I especially like this:

Other [critics and skeptics] get moralistic. This country is already too profligate, they cry. It already shops too much and borrows too much. How can we solve our problems by borrowing and spending more? The liberal technicians brush this away, too. Economics is a rational activity detached from morality. Hardheaded policy makers have to have the courage to flout conventional morality — to borrow even when the country is sick of borrowing.

That's right - Obama needed to find the courage to let Nancy and Harry buy every bit of pork that had accumulated on the Democratic wish list during the darkness of the Bush years.  Bold!  The economy may yet limp into recovery in time to give Obama some oxygen for 2012.  However, unlike Reagan in the depths of 1982 or Clinton in 1994, Obama can hardly run as the man with a plan who made the tough choices.  Flipping the keys to Nancy and Harry was the opposite of leadership.

RESPONSE:  Krugman fires back:

Second, David would have us believe that the Obama people were misled by their excessive faith in models. But we actually know what happened when the stimulus was being discussed: the modelers, who said that we needed something much bigger, were dismissed in favor of gut feelings about market psychology.

We will never know whether a bigger stimulus would have been effective.  One might wonder about the availability of even more shovel-ready projects, and of course, Krugman would have experienced terminal apoplexy if the stimulus was made larger by way of tax cuts.

On the other hand, Krugman is correct in saying that some economists, himself included, thought the stimulus was too small at the outset.  Krugman has less to say about Keynes' "animal spirits", upon which Broks harped; I don't think many people believe that Barack, Nancy and Harry inspired the confidence of the business community.

 

Comments

[Neo]

A House Ethics subcommittee announced Tuesday that it has found New York Democratic Rep. Charlie Rangel guilty of 11 ethics violations.

The panel's chairwoman, California Democratic Rep. Zoe Lofgren said the committee rolled two charges together, meaning that Rangel was ultimately charged with 12, not 13 charges as originally stated. She added the committee was split on one of the remaining 12 counts-- a charge of harming the credibility of Congress.

I'd have to say that Rangel is "not guilty" of harming the credibility of Congress because Congress has no credibility to harm.

[NK]

In Short Barry H is an 'effin Muppet!!*

*(UK regional definition)

[Jack is Back!]

He had to flip the keys to Harry and Nancy because he didn't know how to drive (even into a ditch).

By the way, at the LUN is the full story of the Slurpee!

[Rick Ballard]

"Everything is rigorous. Everything is science."

"Everything" is expressed in scientistic language in order to give the appearance of science. I am wholly unsurprised that Brooks is so ill educated that he cannot trace scientism from Hegel, Condorcet and LeComte through Bentham to Marx. I will be very surprised if he ever takes the few hours it takes to work through Hayek on the subject.

[jimmyk]

Brooks seems confused. This has nothing to do with morality or psychology, it's a matter of good science vs. bad. He somehow stumbles onto the right answer for the wrong reason at the end:

It all makes one doubt the wizardry of the economic surgeons and appreciate the old wisdom of common sense: simple regulations, low debt, high savings, hard work, few distortions. You don’t have to be a genius to come up with an economic policy like that.

It's about those who think they know better and want to engineer society vs. those who understand how markets work, as did Adam Smith, Hayek, Milton Friedman. Friedman was every bit the scientist that Keynes was, he just had a better model of how the world really works.

[Clarice]

He's too much of a genius to be bothered with details, David B. Get with he program.

[Danube of Thought]

I remember about forty years ago reading someone's description of Keynesians: they believe that an economy is a machine that can be made to produce desired results if only the right experts just open and close the right valves, monitor the gauges and engage the right gears. No amount of failure can dissuade them from this belief.

[Jack is Back!]

Rush Limbaugh just laid off 3 people. Their job was to come up the topics for him to discuss on his show. But after visiting JOM today, he figures TM has done the work of those 3 and he has the all the material he needs. Not only that but by bringing Brooksy into the mix, TM has set off the hounds of hell down in Palm Beach.

Don't surprise, Tom, that you get a ride on EIB One, the Gulfstream IV that Rush owns. May take you to the next Steelers home game.

[jimmyk]

No amount of failure can dissuade them from this belief.

Exactly, because it's not falsifiable, at least to the true believer. If jobs weren't created, no problem--they were "saved." Or (as the Socialists and Communists say about their failures), "It just wasn't fully implemented."

[Danube of Thought]

Henry Hazlitt had it right a long time ago.

[Army of Davids]

Lame- duck.

Even weakened.

Nancy and Harry still have large payback to the unions. Watch out for what get's thrown in late night and backdoor.

Union pension bailouts are unlikely but the Soviet unions will expect something.

[MarkO]

If you were to lay all economists end to end . . ..

[bgates]

These models can be used to make highly specific projections.

What he lists as projections have turned out to be postulates. "If the government spends $800 billion on a stimulus package, that will produce 3.5 million in new jobs"; and if over that period employment goes from 150 million to 146 million, then they conclude employment would have dipped to 142.5 million if it weren't for the stimulus. It's unfalsifiable. Economic intelligent design - only without the intelligence (and the economics isn't so hot either).

[Appalled]

If you were to lay all economists end to end . . ..

You'd be one bored and desperate girl.

[Danube of Thought]

I once worked in a shop within the Executive Office of the President. It had positions for five economists; internally they were known as practical economists and end-to-end economists. As in, "when Fred leaves we're gonna need another end-to-end economist."

[jimmyk]

If you were to lay all economists end to end . . ..

The good ones tend to be short (Friedman). The tall ones (Galbraith), not so much.

[MarkO]

OK, I'm the designated straight man. What won't they reach?

[jimmyk]

MarkO, the standard punchline is "a conclusion."

[daddy]

Shoot,

Wish I had started a stopwatch to see how long this Obama speech at the Medal of Honor Ceremony turns out.

[jorgxmckie]

Well, if they were laid side-by-side, it would be the result of Keynes' observation that "in the long run, we're all dead."

[Extraneus]

It's uncanny how Democrats also believe in Keynesianism. Undoubtedly, it's the science. Really an amazing coincidence, though.

[daddy]

I wonder,

"...we were sitting on his couches, and I was looking at his pant leg and his perfectly creased pant, and I’m thinking, a) he’s going to be president and b) he’ll be a very good president."

Was that observation rigorous Science or something else?

[Thomas Collins]

I wonder whether the JOM Council of Economic Advisors might help me out here. My dim memory is that the idea that Bernanke type open market operations might reduce unemployment is based on the notion that such operations would generate inflation that would fool workers into temporarily accepting a lower real wage rate, thus allowing the hiring of more workers. Noone to my recollection seriously argued that this was anything more than a short term fix under the most optimistic scenarios, and that any country that didn't focus on providing the framework for increasing productivity (basically by keeping marginal tax rates low and taming the bureaucratic state) was doomed to slow or no growth, whether or not Bernanke type open market operations were employed. Am I forgetting something? If not, isn't it time to cut out the tricks and focus on whether the existing framework of taxes and rules promotes productivity growth?

[MarkO]

jimmyk, what would Steve Martin say?

[steve]

Both sides fail to fully acknowledge that economic policies only work to the extent that the people think they will work. Building confidence is key.

Once upon a time, people believed that Keynesian stimulus would work... and presto, they did. Now, we don't... and thus, all the billions of dollars of spending stimulus accomplished very little.

Even the so-called conservative recommendations such as cutting taxes and regulations will succeed in boosting the economy only if the public sees those steps as being a net positive... a self-fulfilling set of conditions, true, but reality nonetheless.

[narciso]

Well having done the wrong thing on purpose, let's try the seemingly right thing and see how it works out, ok

[Thomas Collins]

See LUN for a short piece eviscerating Kevin Drum's denial that Obama's economic policies are causing uncertainty that is harming the economy.

[Clarice]

You beat me to it, TC. It's a great piece.

[BobDenver]

So, steve, either people wised up or people dumbed down.

[daddy]

OK,

For TM's Birthday I actually just took 30 seconds or so to scan the Linked Brook's column. (Haven't done that in a couple years now).
Here's what I gather.

1) Brooks has a desperate personal condition. He is too much of a coward to admit he was an imbecile for falling in love with Obama's pant crease, so to rationalize to himself that astounding bit of emotional idiotic sycophancy, he has to somehow remove blame from Obama's incompetency and place it somewhere else. And here's how he does it.

2) Brooks is at least aware that CP Snow wrote a book on the split between Science, and the Humanities Intellectuals who highjacked the word "Intellectuals".

3) Brooks decided to riff off that idea just enough to disingenuously create and criticize Scientific "strawman" economists, that could then be used as the excuses for Obama's economic ineptness, thus re-rendering Obama blameless and reborn again as a legitimate object of Brook's idiotic adoration, thus freeing Brooks once more from having to admit to himself the repulsive truth of his inexcusable idiotic emotional sycophancy.

So all in all it is once again Brook's lying to everybody possible, but mostly to himself, and I almost consider him equivalent to Norman Blake in the end of Hitchcock's "Psycho", where he is sitting there in the persona of his mother, soliloquizing that everyone is staring at him, but just to prove that they are all wrong about him and he is right, he won't even wipe ">http://cdn.ihatethemedia.com/wp-content/uploads/obama-fly-on-lip-e1277323024991.jpg"> the fly off his face.

Oops, sorry. Here's the proper ">http://2.bp.blogspot.com/_6IDK_OzQUjA/SaAooeO2usI/AAAAAAAAAx8/dwrR9c9VXw4/s400/norman%2Bbates.gif"> pic.

KayyyyyyyyyyyyyyyyyyyRooooooooooooo.

[bgates]

I was looking at his pant leg and his perfectly creased pant

I've been remiss in not mentioning that David Brooks is a cancer.

[matt]

carrying on from a previous thread, God does have a sesne of humor.

Neil Young's self built hybrid car caught fire and seriously damaged a warehouse containing instruments and memorabilia.

The car was converted last year by Young to run on biodiesel and electricity. My guess is that he got some of the parts from Willie Nelson.

[Danube of Thought]

Bgates is going all Kevin Garnett on us.

[BobDenver]

The NY Times reports that Senator Kyl has politely told President Obama to take his nuclear disarmament treaty and shove it.

I worked at Kyl's law firm years ago and have complete faith in his conservative and defense bona fides. If he had signed off on the treaty I would have swallowed hard and accepted it.

But boy, am I glad I don't have to do that.

[MarkO]

"I was looking at his pant leg and his perfectly creased pant"

That's just creepy. Come on, man. What? either Brooks has never sent anything to the cleaner or, well, not that there's anything wrong with it.

[jimmyk]

If not, isn't it time to cut out the tricks and focus on whether the existing framework of taxes and rules promotes productivity growth?

Yes. Of course it has always been that time, but there's no time like the present.

There are believers in the "liquidity trap" argument that the economy can get permanently stuck in recession and only a stimulus (either QE or spending/tax cuts) can spring the trap, but when I hear that I'm always reminded of what they tell students in med school about diagnosis: If you hear hoofbeats, it's probably a horse (not a zebra).

[Extraneus]

A message from the Joe Miller Campaign.

Dear x,

Lisa Murkowski and her friends in the media has misled you. They want you to believe that Joe has lost this election. Below, we dismantle 5 common myths going around:

MYTH 1: Joe Miller is forcing the state of Alaska to count ballots.

Lisa Murkowski is forcing the count in Alaska - by ignoring the primary process (after promising to stand by the results) and conducting a write-in campaign costing millions of dollars, Lisa ensured a drawn-out counting process would be required to determine a victor.

MYTH 2: Lisa Murkowski is beating Joe Miller

After 7 days of write-in ballot counting, Republican nominee Joe Miller still leads incumbent Lisa Murkowski in the uncontested write-in ballot count. As of Monday night, nearly all write-in votes have been counted. Joe Miller has 90,448 uncontested votes and Murkowski only has 84.563. If current trends hold, Miller and Murkowski will likely end up in a dead heat in the uncontested ballot count.

MYTH 3: Joe Miller is indiscriminately throwing out ballots

By law, Alaska statute mandates that the candidates name be spelled correctly. Joe Miller is challenging ballots based on that statute. As a strong believer in the rule of law and constitutional values, Joe believes in this high standard of proof required for write-in ballots to be considered.

Given that the counting process alone has cost the state significant time and resources, a strict interpretation of ballots is necessary to ensure election results are determined in a fair and timely manner. This is crucial for Alaskans to receive proper congressional representation.

MYTH 4: The law leaves it up to ballot counters to determine what ballots are legitimate

Lisa Murkowski’s campaign has spent considerable funds attempting to ensure that her name is properly spelled on the write-in ballots, proving that she anticipated and prepared for a strict interpretation of law. The law allows no room for personal interpretation. You spell it correctly, or you don't.

MYTH 5: There are no reports of fraud or voting irregularities

The Joe Miller campaign has documented numerous instances of voting irregularities.

While nothing can be done about these cases now that the election has already been held, the Joe Miller campaign believes that these cases prove why it is all the more necessary to ensure that there is strict interpretation on the ballot counting process.

Stay tuned for constant updates and please share this with your friends and family.

Joe Miller for Senate Campaign

[The Sheep Nazi]

As to the assertion that stimulus opponents are driven by moralizing. I have found Kevin Murphy's presentation (go here for the original pdf ) to be persuasive. I've also heard him talk through this argument (can't find a link to audio) and there was no moralizing tone there, it was more of a flat dry look guys, there's no way this is going to work. Murphy and Robert Barro have had the better of the argument so far, so far as I can see.

[BB Key]

OT: Go to CSPAN and watch the ground breaking for the GWB Library @ SMU... Speeches by Condi, Cheyney,W. and Laura.....the line of the day was by the VP....this is the only shovel ready project in America....Brooks ought to be tied to a chair and forced to watch it

[jag]

In a "typical" recession, one generated by inventory imbalances, yeah, some minor tweaks lowering interest rates by the Fed and doing some "stimulus" spending can perk up an other wise healthy economy.

What Krugman refuses to grasp seems to be the fact that this recession is one born of a reversal of massive leverage. Not only in the US but around the world. That is going to be unwound, one way or another, and as it normalizes it will be nearly impossible for any stimulus or other government program to artificially induce growth.

There's just too much debt to be destroyed or "handled. What I thought Brooks really missed was the fact that incentives are everything in economics. This is what all too many liberals miss. Nothing occurs in an economy in a vacuum. One distortion, however "well intended", will lead to another and the more money involved, the bigger the distortion and longer it will take to be resolved.

That is the simple fact. People see the distortion and change their behavior without regard to the "science" that the Krugman's love to assume, linearly , should result from a policy gimmick. The lack of understanding of this dynamic is almost as amazing as their lack of humility about the probability of their suggested outcome.

[macphisto]

"...we were sitting on his couches, and I was looking at his pant leg and his perfectly creased pant, and I’m thinking, a) he’s going to be president and b) he’ll be a very good president."

"Was that observation rigorous Science or something else?"

Gender Studies.

[glasater]

GW Bush's ground breaking ceremony video

[Melinda Romanoff]

jag-

That's the confines in which Brooks operates, both in DC and Manhattan.

In other words, catch up.

Nobody here but the choir.

[Melinda Romanoff]

glasater-

I heard there was some mocking birds at that event. Could that be true?

[maryrose]

Politico for the last 5 days has ascertained that Murkowski is winning in Alaska. Never once have they said that Miller is ahead which he is. It's just like calling the Connecticut governor's race for the dem when at the time the repub was clearly ahead. Every election as soon as a dem is ahead before even a final count, the media calls it right away. On election night some repubs were obviously going to win yet the reporters delayed making the announcement.Very biased and totally predictable.

[LouP]

"...Obama people were misled by their excessive faith in models...."

Beware of climatologists and economists bearing models.

If it's science those models will have been thoroughly tested and validated, otherwise it's nothing but a theory advanced by self-anointed "experts" who earn their living trying to convince everyone else they know what they are talking about.

[anduril]

Nathan Guttman at The Jewish Daily Forward has some excellent coverage of the AIPAC civil case that I posted about recently. And when they say down and dirty they really mean it:

AIPAC Gets Down and Dirty in Pushback against Rosen Defamation Suit

WASHINGTON — The espionage case against two senior officials of the pro-Israel lobby in Washington was dropped last year. But it has not been forgotten, and is now threatening to draw the lobby into new depths of mudslinging.

Papers filed in the civil lawsuit of former lobbyist Steve Rosen against his previous employers at the American Israel Public Affairs Committee include mutual accusations of using pornographic material at the lobby headquarters, among other allegations. The papers, based on depositions taken from Rosen and from AIPAC principles, dig into the private lives of the involved parties. They also reveal in detail the close ties AIPAC officials held with Israeli diplomats based in Washington.

“After reading this stuff you feel like you need to wash your hands,” said one pro-Israel activist after skimming through the 260-page document, which is laced with graphic descriptions and invasive personal details. He declined to be named, out of a desire to avoid involvement in the case.

At issue is Rosen’s $20 million defamation lawsuit against his previous employers at AIPAC, who fired him and his colleague Keith Weissman in 2005 — several months after both had been indicted under a rarely used espionage statute because they allegedly received and passed on classified information. AIPAC, in a move that could be seen as meant to embarrass Rosen, revealed in its court filings extensive parts of the depositions, many of them dealing directly with Rosen’s personal life.

...

AIPAC claims that Rosen, who was director of foreign policy issues at the lobby and one of its most senior and well-known employees, had engaged in viewing pornography on AIPAC computers at the lobby’s Washington offices. Partial transcripts of the lengthy videotaped deposition of Rosen, which were made public as part of AIPAC’s motion, show Rosen admitted to surfing pornographic websites from work. But AIPAC’s lawyers insisted on more details.

“Q: What type of pornography?
A: Sexual pornography.
Q: What type? Man on man, man on woman?
A: Anything. Anything that occurred to me.”

Rosen also added more details than, perhaps, the attorney for AIPAC had bargained for.

“I witnessed [AIPAC executive director] Howard Kohr viewing pornographic material, [Kohr’s secretary] Annette Franzen viewing pornographic material, probably a dozen other members of the staff,” Rosen said in his deposition. He added that, according to a Nielsen survey, more than a quarter of Americans regularly view pornographic websites at their workplace.

Later in his deposition, the former lobbyist also said he had heard from directors at AIPAC about their visits to prostitutes and he claimed executive director Kohr had routinely used “locker room language” at the AIPAC offices.

AIPAC did not seem deterred from getting dragged into a dirty debate. It also chose to include in its court filing an issue relating to Rosen’s personal life with only a vague connection to the lobby’s claim regarding Rosen’s actions being below AIPAC’s standards. AIPAC’s lawyers questioned Rosen in detail about his attempts to find male sexual companions through Craigslist, an act Rosen referred to as “sexual experimentations.”

...

Rosen and Weissman learned from Franklin that Iranian forces were allegedly operating in Northern Iraq and that they were plotting to kidnap Israeli operatives. They then disclosed this information to a senior Israeli diplomat, Naor Gilon, and to Washington Post reporter Glenn Kessler. The depositions reveal that after being confronted by the FBI at his home, in what he described as a “very intense exchange of words” Rosen made a phone call to AIPAC’s legal counsel, who was shaken by the news and asked Rosen to come immediately to the lobby’s headquarters.

Rosen then called Rafi Barak, at the time the deputy chief of mission at Israel’s Washington embassy. Rosen convinced Barak to cancel other appointments and meet immediately at a coffee shop. He described to the Israeli diplomat the encounter he had just had with the FBI and the allegations they made about Israelis receiving classified information. “I probably made some reference to Pollard,” Rosen recalled, and Barak, according to the deposition “got very upset too.”

AIPAC raises this episode in an attempt to prove that Rosen did not follow directly the instructions of the lobby’s lawyer to come immediately to the office. This could demonstrate how Rosen did not live up to AIPAC’s standards. But former AIPAC staffer and now liberal columnist M.J. Rosenberg sees more to it. According to Rosenberg, if Rosen proves that his operations, including going to a foreign official to warn him about the investigation, were all part of AIPAC’s standard operating procedures, “that would mean that AIPAC is not a domestic lobbying organization at all, but something very, very different.”

...

[anduril]

Really good article on dealing with Iran: The Fog of Containment - George Kennan shouldn't be our Cold War guide to dealing with Iran. Try Richard Nixon.

[Danube of Thought]

Two asshole posts scrolled by in less than one second.

[centralcal]

I think he may have a mental illness.

[PD]

More bipartisanship:

Yesterday I wrote about Eric Cantor's experience (as related in "Young Guns") with Obama's brand of bipartisanship. Cantor, after taking the Republican alternative proposal to the stimulus to a meeting with Obama, was told by Obama after discussing the ideas in the proposal: "I won." Note that Obama was aware of the Republican ideas presented at this meeting, even though he afterward went out and said that the Republicans had no ideas, had no proposals, and were just "the party of no."

Today I read Paul Ryan's part of the book, and he relates his own personal experience of Obama's bipartisanship. In early 2010, some Republicans met in Baltimore and invited Obama to come, which he did (to his credit). This was after Ryan had unveiled his Roadmap for America's Future. Obama was all compliments, telling Ryan it was "a serious proposal." A few days later, Obama's budget director, Orszag was trashing it as a risky scheme. Other Dems went on the attack as well. And as far as I am aware, Obama has never acknowledged the proposal. He continues his unbroken line of attack that the Republicans have no ideas or proposals, knowing full well that this is not true because he himself has discussed them with Republicans. So much for bipartisanship.

The American people certainly deserve better than someone whose acquaintance with the truth is only from a great distance.

[PaulL]

The combo of boldface and length makes it really easy to determine what it is and zoom by. I doubt if I waste even a second.

[Rick Ballard]

"If not, isn't it time to cut out the tricks and focus on whether the existing framework of taxes and rules promotes productivity growth?"

TC,

The uncertainty generated by Democrat control seems to have driven unemployment to 10% and that has been extraordinarily beneficial to productivity growth. There's nothing like seeing five people in line for every job to focus employees attention and effort towards not joining them.

The uncertainty is having a very negative impact upon GDP growth but even a return to the status quo ante Democrat control would not speed up the digestion of the debt pig working its way through the economic python. That process will take another 2-3 years and it won't really be through until a few more zombies are dismembered and any useful remains distributed to folks more trustworthy than their current owners.

Of course, that's only what history says will have to happen - I can't really color it with anything scientistically palatable to modelers.

[Charlie (Colorado)]

Am I forgetting something? If not, isn't it time to cut out the tricks and focus on whether the existing framework of taxes and rules promotes productivity growth?

Yes, but also yes.

What you're forgetting is that inflation (up to a certain point) encourages investment, because you need something better than a savings account to keep up.

(After that point, it encourages hoarding real goods, like dehydrated food. The breaking point is when inflation exceeds any reasonable rate of return on a real investment.)

Similarly, deflation encourages keeping money in a mattress; if it's deflating you gain simply by taking as little risk as possible.

But increasing productivity is inherently deflationary -- it takes less work to make the same goodies. So increased productivity tends to decrease inflation.

(If your money supply is rigidly fixed, as with a hard-metal standard, then increasing productivity is effectively deflationary, which makes hard money schemes discourage investment and thus discourage increasing productivity.)

In a world with a perfectly-controlled money supply, adding money and increasing productivity exactly balance out, resulting in stable prices on average. Stuff that is produced with greater productivity gets cheaper to make, causing greater profits, which eventually get distributed, giving people more cash in hand, which is where the money added to the system goes.

(This all assumes a constant "velocity" but you can work the whole example as an exercise using quantity times velocity; it's exactly the same as current and voltage in an electrical circuit.)

So in the current situation, things that encourage increasing productivity (which is to say investment) are desirable: they make the things we want to buy cheaper, and put the extra cash out for other things. GDP grows, tax revenues grow without increasing tax rates, and we can pay off the debt and all.

[glasater]

Melinda--

Started to listen and got into the video for about 15 mins. Then another project called...

I will catch up...soon:)

[sbw]

I published an editorial against the likes of HR 3808 yesterday, which, not to put too fine a point on it, started, "The 111th Congress, in its lame duck session, will likely be asked to legitimize the actions of predatory lenders. If it does so the Congress may nail down the dubious distinction as the most corrupt ever, legitimizing thousands of felonious assaults on the court system, banking system, commercial markets, and taxpayers."