Capitalism Will Save Us! Keynes Will Save Us! Greenspan Admits Mistake! & More!

Here are some readables from recent news:

Paul Wells explains that the effort to create a head-of-state-version of the G20 finance minister meetings had long been spearheaded by former Canadian PM Paul Martin. The financial crisis has generously resolved one of the biggest barriers to its creation: what to talk about!

Steve Forbes argues that capitalism will ride to the rescue, picking the ambitious target of next spring for the downturn to reverse itself. Forbes' prediction, which is a little sooner than mine, is likely influenced by two things. First, the inability of the human mind, so focused on the present and recent past, to imagine a prolonged economic downturn. Second, the fact that the cost of being optimistically wrong is small. But if he turns out to be right, oh boy...

Sir Robert Skidelski, the accomplished Keynes biographer, is predictably suggesting that the time is ripe for a new, Keynes-inspired set of theories to deal with current economic developments. I have already explained some of the logic behind using fiscal, rather than monetary, stimulus to kick-start the flagging economy. And in fact, it is probably this Keynes-inspired thinking that has led Fed Chairman Ben Bernanke to endorse a fiscal stimulus package. According to the BBC's Robert Peston, the UK is also considering "a substantial and sustained increase in public spending to offset the contraction of spending by the private sector"

Alan Greenspan admits that he has discovered a flaw in his thinking. Unrelated: a thermometer in hell drops a couple of degrees.