A born-again Keynesian who remains an ardent opponent of big government, Posner may remind some readers of the two-headed pushmi-pullyu in the Doctor Dolittle books. On the wickedness of Greenspan and the greatness of Keynes he sounds like Paul Krugman’s doppelgänger. But facing the other way on the fallibility of regulators is Posner’s free-market Chicago head, which is scathing about attempts to police executive compensation, skeptical about the value of a new consumer protection agency and anxious about spiraling fiscal deficits and the risk of future inflation. For Posner, the American system of government is “cumbersome, clotted, ­competence-­challenged, even rather shady.” He confesses himself “perplexed by how government . . . has managed to escape most of the blame for our current economic state.” Well, maybe because his fellow Keynesians have relentlessly lauded government as the solution.

In his defense, Posner can cite Keynes’s letter to President Roosevelt, published in December 1933, which explicitly warned that “even wise and necessary reform may, in some respects, impede and complicate recovery. For it will upset the confidence of the business world and weaken their existing motives to action, before you have had time to put other motives in their place.” This is the essence of Posner’s argument here. “Ambitious reforms are premature,” he concludes, “pending a rigorous inquiry into the causes of the depression.” Rather than hastily drafted thousand-page-long legislative measures, he would like to see an executive commission similar to the 9/11 commission to establish what those causes were.

Otherwise, we should apply lessons that have already been learned in the realm of counterterrorism. We need more rotation of senior personnel among government financial agencies; better funding of those agencies; more pooling of intelligence between those agencies.

“The Crisis of Capitalist Democracy” has been written in haste, and it shows. Characteristically, Posner has not just one but two blogs and too much of this book reads as if it first saw the light of day online. But the trouble with blogging is that the more you blog, the less you read. Since he is not an economist, Posner cannot afford to take as many shortcuts as he does. The result is that confusions occasionally creep in, for example about what exactly constitutes a bank’s capital and how exactly bank leverage (the ratio of liabilities to capital) was regulated before the crisis.

Most perplexing of all, the ­small- ­government Keynesian calls for a flurry of reforms as half-baked as anything in the current bills before Congress: end the S.E.C. certification of certain credit rating agencies as “Nationally Recognized Statistical Rating Agencies”; tie bank capital requirements to the business cycle, so that they rise in good times; and restore the Glass-Steagall Act that separated commercial and investment banking during the Depression. This last suggestion is especially strange as Posner must know that the preservation of Glass-Steagall would have done nothing whatever to alter the behavior of the men running Bear Stearns, Lehman Brothers or A.I.G.

Posner makes it clear that he understands the risks the United States now faces as the crisis of private finance continues its metamorphosis into a crisis of public finance: an exploding debt relative to gross domestic product; larger risk premiums as investors prepare for higher inflation or a weaker dollar; rising interest rates; a greater share of tax revenues going for interest payments; a diminishing share of resources available for national security as opposed to Social Security. “As an economic power,” Posner concludes, “we may go the way of the British Empire.” Indeed. It seems not to have struck the judge that British decline and the rise of Keynesianism went hand in hand.