The Free Market Threat to Democracy

Naked Capitalism has published The Real News Network video The Free Market Threat to Democracy.

From Naked Capitalism we have the introduction:

This Real News Network interview with professor emeritus John Weeks discussed how economic ideology has weakened or eliminated public accountability of institutions like the Fed and promote neoliberal policies that undermine democracy.

There are many good points here in the interview, but at one point I think it goes seriously off the rails.

Second of all, probably most of your viewers will not remember the days when we had fixed exchange rates. We had a world of fixed exchange rates in those days that represented the policy, which government could use to affect its trade and also affect its domestic policy. There have been deregulation of that. We now have floating exchange rates. That takes away a tool, an instrument of economic policy. And in fiscal policy, there the, here it’s more ideology than laws, though there are also laws. There’s a law requiring that the government balance its budget, but more important than that, the introduction into the public consciousness, I’d say grinding into the public consciousness, the idea that deficits are a bad thing, government debt is a bad thing, and that’s a completely neoliberal ideology.

This makes absolutely no sense, and seems to have the case exactly backward. Our federal government has no rule that the budget must be balanced. Fixed exchange rates were not a tool that could be used to affect trade and domestic policy in a good way.

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