Edward C. Harwood

Skidelsky: The Economic Pendulum Has Swung Again

Sat, 06/13/2009 - 6:12pm | posted by Katy Delay

In his commentary in today’s Financial Times about the economic policy of government stimulus of the economy, Robert Skidelsky, the noted British author and authority on John Maynard Keynes, declares: “What is fascinating is that it is an almost exact rerun of the debate between Keynes and the British Treasury in 1929-1930.”

What Went Wrong With Commercial Banking?

Fri, 03/27/2009 - 7:14am | posted by Katy Delay

Part III

In Tuesday’s post, Part I of this series, I told you about economist Edward C. Harwood’s 1928 prediction of the 1929 Great Depression in published and unpublished articles. He saw imbalances in the banking sector that were leading us into a breakdown of the economy through a misuse of the banking system.

In Part II of the series, I gave Harwood’s description of sound commercial banking, as read in an unpublished article entitled “A Sharp Distinction Should be Made Between Capital Funds and Commercial Credit.” He uses the metaphor of characters in a play. Let me remind you of their names: The Earners, the Investor, the Manufacturer, the Retailer, and the Bank. I recommend that you read Parts I and II first, so that you can make better sense of what follows.

The Origin of This Financial Crisis: 1913

Wed, 03/25/2009 - 6:42am | posted by Katy Delay

Part I

Economists disagree on the identity of the true culprit behind our current crisis. Some blame Wall Street; some blame the progressive politics that pushed Freddie Mac and Fannie Mae beyond their capacity; some blame the profiteering loan brokers, the foxy house flippers, and the naive subprime home buyers in their rush for quick profits. Some blame the Federal Reserve, including me from time to time.

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In reality, all of the above had their role, but they are just players in a game, the rules of which are defined by politicians. The origin of the problem lies in the rule changes that caused the demise of sound commercial banking back in 1913.