One might misunderstand what is said by this guy - which is not that socialism is good. The headline is just too misleading.
Policymakers "Got It Right": Why Free Market Ideology Is Wrong [Click for video]
Just like the market's mood, economic orthodoxy moves on a pendulum - only the swings come far less frequently.
Generally speaking, from the 1940s to the 1970s, the prevailing wisdom in economic circles was that government was a force for good. Then came the Reagan Revolution of the 1980s, which steadily led to the dominance of free market ideology until the present day.
After the credit crunch of 2007-08, even free market stalwarts like Alan Greenspan admitted the ability of markets to self-regulate was a "flaw" in the prevailing view of capitalism.
But even after the implosion of Wall Street, a "high degree of residual [free market] ideology" remains, says Mark Dow, fund manager at Pharo Management, a global macro hedge fund with about $2 billion of assets.
This view that government isn't the solution, it's the problem is "impeding progress" and limiting policymakers' abilities to bring about necessary reforms to reduce the odds of another systemic crisis, Dow says.
Being a former staff economist at IMF and Treasury, it's not surprising Dow believes government has a role in keeping the market's "animal spirits" in check; but he's not advocating socialism -- far from it. Nor does he believe the Obama administration wants to maintain such a high degree of government involvement as currently exists, noting Tim Geithner and Larry Summers (particularly) are big believers in free market capitalism.
Whether the government and the Fed can get the "exit strategy" right is to be determined, but Dow has faith in policymakers and believes they've mainly "got it right" so far. It may not be perfect but he says actions taken to date "saved the system" - arguably from itself.
Well... politics aside, always aside on this blog - I do hope government will step back when it should, one can't blame those who see what is happening as alarming for raising flags and saying so.