We touch on a whole bunch of different matters, many of which I wish we could have gone into in more detail.
In particular, I want to clarify two things in passing:
First, at some point in the video I say that I “don’t understand the counter-argument” to the view that we have inadequate aggregate demand, and that therefore unemployment is higher than it “needs” to be. I want to be clear that the fact that unemployment is “too high” does not mean that “add more liquidity to the system via quantitative easing” is the solution, or that doing so will even work. For example, there’s a very real concern (voiced by Chile’s finance minister here) that any action by the Fed to resume quantitative easing will only further inflate the bubble in emerging markets and do little to increase domestic demand. But I do think it’s pretty clear that unemployment is “too high” in the sense that most of the increase in unemployment is the result of a lower level of economic activity rather than structural changes (e.g., a shift out of construction and into other sectors such as health care).
Second, towards the beginning of the dialogue I said that we should talk separately about the questions of individual justice associated with the foreclosure crisis as opposed to the systemic questions (both systemic causes and systemic results). But we never really got back to the first question (nor did we spend as much time as I had hoped on the systemic results side of the problem, as opposed to systemic causes). So I do want to be clear: while I think the systemic cause of the foreclosure mess is complicated, and hence difficult to solve, the acute issues of malfeasance and outright fraud strike me as rather straightforward and quite appalling. It’s not obvious to me that a nationwide moratorium on foreclosures is an appropriate response, but hefty fines and more severe sanctions levied against malfeasant or fraudulent servicers strike me as very much in order if anything like the kinds of things we’ve been hearing about are true.