We are developing the social individualist meta-context for the future. From the very serious to the extremely frivolous... lets see what is on the mind of the Samizdata people.
Samizdata, derived from Samizdat /n. - a system of clandestine publication of banned literature in the USSR [Russ.,= self-publishing house]
|
Samizdata quote of the day “In addition, one should not minimize the great economic achievements of the past 25 years in the form of rapid growth in world GDP, low world inflation, and low unemployment in most countries. Perhaps these achievements will be overshadowed by a deep world recession, but that remains to be seen. If the impact of this financial crisis on the real economy is not both very severe and very prolonged, and time will answer that question, the combination of the past 21/2 decades of remarkable achievement, and the economic turbulence that followed, may still look good when placed in full historical perspective.”
– Gary Becker.
Like Professor Becker, I think fears of a repeat of a 1930s-style depression are unwarranted. What is a serious concern in my mind is the likely explosion of poorly thought-out regulation by politicians who seem to have forgotten how it was often such regulations, as well as lax monetary policy, that is at the crux of the current turmoil.
|
Who Are We? The Samizdata people are a bunch of sinister and heavily armed globalist illuminati who seek to infect the entire world with the values of personal liberty and several property. Amongst our many crimes is a sense of humour and the intermittent use of British spelling.
We are also a varied group made up of social individualists, classical liberals, whigs, libertarians, extropians, futurists, ‘Porcupines’, Karl Popper fetishists, recovering neo-conservatives, crazed Ayn Rand worshipers, over-caffeinated Virginia Postrel devotees, witty Frédéric Bastiat wannabes, cypherpunks, minarchists, kritarchists and wild-eyed anarcho-capitalists from Britain, North America, Australia and Europe.
|
There is a certain amount of confidence-giving in Professor Becker’s article, through a calm and thoughtful analysis.
However, there is one bit that I must take issue with. He writes:
And he writes:
This strikes me as a totally specious argument/excuse for what has happened.
History is full of false predictions, and true ones (likewise fools and sages): there is no recent change in this, nor any special case for the economy or financial sector.
Those in positions of authority are there to exercise sound judgement, choosing what (and/or whom) to believe, and what (and/or whom) not to believe. When they get it wrong, or at least seriously or repeatedly wrong, they should be held responsible for their bad judgement.
With the current financial and economic crisis, there has been a triality (at least) of fault:
(i) government (through spending and policy) buying the votes of the less able in society, at too high a price;
(ii) banks in lending with insufficient liquidity to support their chosen mismatch between short-term borrowing and long-term lending, and having too poor a leverage to maintain confidence and so survive the eventual downside;
(iii) imprudent people, through spending money that they don’t yet own, on so large a scale that (with a modest, and so highly probably, hiccup in their fortunes) they never will have enough.
It may well be true that the current emergency measures (copied from the Swedish banking crisis of 1991/92, so I am told, rather than being particularly and brilliantly original) are the best (or at least a good) way out of the mess we are currently in.
However, it irks that those 3 guilty groups identified above are going to suffer no more, and probably less, than those who have lived their lives within their incomes (and perhaps modest extension through prudent borrowing).
It is actually very easy for government to decide to deal with any such emergency by spending taxpayers’ money (perhaps profligately). Whether it really works is much more of an issue: the UK car and shipbuilding industries spring to mind.
As to the mistakes being made in the current rescue, at least part of the problem is several banks have become too big to allow them to fail. So the situation is improved by making an even bigger bank (Lloyds TSB plus HBOS)! With a private ‘rescue’ there might have been some purpose in the emergency waiving of prudent monopoly regulation; but why should that merger still go ahead within the pseudo-nationalisation option? This unnecessarily puts at risk Lloyds TSB (one of the more prudently run UK banks so I understand), just when we might be needing at least some banks with a good track record.
Best regards
Becker: “If the impact of this financial crisis on the real economy is not both very severe and very prolonged…”
“The impact of this financial crisis on the real economy” is not the prospective disaster. The prospective disaster is the “impact” of government action.
Pearce: “I think fears of a repeat of a 1930s-style depression are unwarranted.”
Like Chou En Lai’s estimation of the French Revolution in the early 70’s: “It’s too soon to tell.” There is a hell of a lot that they can completely scramble before we’re over this.
“……… by politicians who seem to have forgotten how it was often such regulations….’
To have forgotten it requires us to assume this ever occurred to them in the first place. I’m not sure that’s a valid premise.
J.P. every day the main governments of the world take actions which make a economic collapse more likely.
The elite (both political and academic – and financial) are a fatal mixture of ignorance and arrogance.
If they were just ignorant it would not matter – because they might not do anything.
But they think they know it all – and what they “know” is destructive nonsense.
And they act on their “knowledge” of destructive nonsense.
It is what Ludwig Von Mises called “destructionism”.
“It is not as bad as you say”.
They have just given Paul Krugman the Nobel Price for economics.
And in the political world the wild statist Bush is about to be replaced by the even worse (indeed Marxist) Barack Obama.
With the full support of the media and academia.
It is as bad as I say it is.
I have watched this comming for many years (“ideas have consequences” as Richard Weaver used to say, and the ruling ideas, the “metacontext” in the West has been terrible for a very long time) and I, and many others, have warned and warned and warned.
But our warnings have failed.
I have failed.