Dec. 9 (DPI Book Review) It hasn’t been that easy a road for Hunter Lewis, the investment consultant who retired with his Wall Street fortune a decade or so ago to write and promote things he believes in.

Many of the ideas he does believe in – markets provide more trustworthy information than people, and participation in those up-and-down markets makes us better behaved, even more moral — are self-evident, even time honored, yet curiously far-off to many Americans.  Perfectly intelligent people tend to shrug blankly when you discuss them. And such ideas often are dismissed as libertarian, the political kiss of death in America today.

Thus Hunter Lewis has remained well outside the American mainstream. There’s no doubt he is an original, respected — and usually self published — voice, a remote planet in our shrinking cluster of public intellectuals. Paul Krugman, sadly, is Jupiter; Hunter Lewis, Neptune.

But Lewis’ latest little book – “Free Prices Now!” – may change all that. Timing is everything, of course, and it’s just possible that his 230-page essay is ready for a much wider audience, especially among young technophiles who struggle to understand what’s going on with our economy these days.

Lewis asserts with clarity and conviction that the grinding  stimulus spending, negative real interest rates and the now-gigantic role of our central bank, the Federal Reserve, have spurred all kinds of distortions, especially price distortions, in our economy. This activity might have short-term benefits, but it’s allowed congress to goof off, avoid hard choices and make us flirt with the possibility of a greater economic collapse. Keynesian policies have run amok, he says.

It’s crony capitalism, too, Lewis says. Washington has enlisted large Wall Street firms as agents in its self-dealing, as the firms assist in Treasury bond distribution and a central bank buyback scheme that is nothing more than printing money, Lewis insists.

And – this is the part that really resonates with me — Lewis points out that Washington is engaging in massive double-talk these days, with messaging so contradictory and confusing about the economy that our central bankers sound like the authoritarian voices of an Orwell novel.  Money printing is now euphemistically called “quantitative easing”; cynical messaging is accepted as the truth by the unsuspecting masses.

More than once Lewis compares the western Central Banks with fascist and communist central planners. And we know how that all turned out.

At a time when the 99 percent is angry at the political establishment, Lewis makes a simple and powerful point: It’s not capitalism itself you should be angry about, it’s a corruption of that capitalism – cronyism and self-dealing – that has hijacked what for a time was a great wealth-creating machine.

The solution: Let the marketplace work it all out. Abolish the Fed. Let interest rates rise to more realistic levels. Let people take their own risks again. Let prices reflect real supply and demand so we can see truthful information again (hence the title). Let people innovate to fix the distortions. And, let the bankruptcies flourish and the fresh starts begin.

Then let old-fashioned values of thrift, hard work and delayed gratification work their magic once again.

Of course, are we as a society even capable of that today? Many people nowadays seem to show contempt for thrift, hard work and delayed gratification — and our political leaders, if they are not pretending they don’t exist anyway, are simply mocked if they do. After all, spending and consuming have become civic obligations for most of us, and saving in this age of negative real interest rates is a sucker’s game.

Lewis has to admit this too: Given this or any government’s preoccupation with power, it all sounds a little quixotic to expect it to willingly hand all its financial muscle back to a marketplace — in any democracy, functional or dysfunctional. Lewis and his pals – they include unfortunately the old libertarian Ron Paul, at this point not exactly a credible torch carrier for this cause — will need a pretty big bazooka to challenge a US government with 10,000 nuclear warheads. Besides there are even less-admirable rivals around the globe only too happy to fill a power vacuum as our Central Bank gets dismantled.

In that respect, Hunter Lewis, for all his brilliance, sounds a bit naive: Just how, exactly, does he expect the Harry Reids and Nancy Pelosis of the world to come around to the idea that we should de-rail their gravy train by shutting the Fed?  The Wall Streeters will just keep funding their re-election campaigns, after all.

There’s also the problem that we are already down this two-trillion-dollar, five-year road of spending. Maybe we should just hope that the economic tide comes back. Or that the collapse is survivable.

But the fact is we live in young times, with new media and fresh technologies. All the kids on Reddit – and I mean people under 50 — may figure out that they can make something good happen.

Yes, Hunter Lewis’s little book is a quixotic essay, but it contains spirited, wonderful messages. It’s just possible that our young revolutionaries will be clutching “Free Prices Now!” as they walk to the ballot boxes.  — Stephen E. Clark

http://www.amazon.com/Free-Prices-Now-Economy-Abolishing/dp/098872670X

http://en.wikipedia.org/wiki/Hunter_Lewis