What's Going On Here?

   Membership on the Federal Reserve Board of Governors will go down to less than half its authorized number as Jeremy Stein leaves to return to his teaching post at Harvard. That would make four vacancies on the seven-member board, whose primary duty is to oversee the economic health of the nation and regulate many financial institutions.
   Meanwhile, the Senate has not confirmed two of President Obama's nominees to the board, and another nominee has not yet been selected.
   Given GOP opposition to anything and everything the President suggests or plans, one wonders whether a refusal to allow a full board would cripple the Fed's ability to function.
   Could this be part of a broader plan by Republican conservatives, their corporate backers and Tea Party radicals to dismantle the Fed?

   Unfettered capitalism is so 19th Century. Look what that brought us -- the so-called Gilded Age of the super-rich, who owned almost all of America's wealth. That disparity is currently being repeated, as one percent of Americans control some 80 percent of the nation's wealth. And the disparity is growing, as documented by, most famously, Thomas Piketty in his book "Capitalism in the Twenty-First Century."

   Many free-market proponents insist that, left alone, an economy will rebalance itself. And they cite Adam Smith and his book, "The Wealth of Nations" as their prime source. At the other extreme are those who look to Karl Marx, who maintained that capitalism contains within itself the seeds of its own destruction. Marx's work was seized upon by later revolutionaries to justify their efforts to topple the Czarist regime in Russia. A main problem, however, was that Marx never intended his predictions to apply to Russia, since it was still a feudal society and had not undergone the industrial revolution that changed Germany and Britain and developed a full-grown capitalist society.
    Now comes Piketty, who has detailed the inequalities between the one percent and the 99 percent. Conservatives, of course, denounce him as a Marxist, even though he disavows such leanings in the introduction to his book.
   Moreover, even a superficial reading of Piketty indicates that he feels both Adam Smith and Karl Marx were wrong. Or at least that they didn't go far enough in their analyses.
   Conclusion: Piketty's work is leading economics into a new age of study, using computers to analyze massive amounts of data to summarize patterns that earlier economists were not able to detect.
   For too long, the field was hijacked by number crunchers, who forgot that economics is a social science, and used econometrics to try to force a round social science into a square pure science box. Piketty, however, does not forget that economics deals with social issues -- what people do with what's available to them -- even as he uses data to analyze trends.