There is a rule from "Mother Nature" that if a living creature makes a mistake, it has to die. Nature does not give second chance. For example-: In forest, if a Deer/Stag is sleeping carelessly, a Lion/Tiger or Grizzly Bear will kill and eat the Deer. But Human beings keep making mistakes after mistakes and further mistakes. They continue to survive after making mistakes. What I mean is that Fannie & freddie, AIG, Bear stearns, Citigroup, Big 3 carmakers & other giant companies and banks have made "Big mistakes" because they are "worthless & without business brains", They should not survive. They have to shut down, if not today then tomorrow. How long do you think "$2.5 trillion bail-out" will save Gaint companies and Banks. They have to shut down one day. "Mother Earth" does not have the resources to support 7 billion people. So the "global financial crisis" was inevitable (had to happen). "Global financial crisis" will happen again in future and it will continue to happen. Human beings and even $100 Trillion cannot STOP "Global financial crisis". Humans have a habit of digging their own grave with their own hands.
You mean do I believe in CAPITALISM ? No actually I think Denmark and Canada are way better. Come live here for a year and see how great it is when the Government controls a big part of your life.
YES, I AGREE But you need a lot of balls to do it. I actually think that if you're (Americans) aren't going to reset your system, at least put the greedy bastards that got the financial markets in trouble the first place in jail. Think about it. No is being punished. CEO's are still flying around in private jets and living in their mansions. Are they losing sleep? It will deeply affect something more than just money to solve.
I agree. The circumstances appear to be beyond the scope of any "quick fix" measures. I think this thing will have to play itself out.
When I was in high school, one of our essay exams was a document-based essay. A question was posed, and based on the given documents and common knowledge, we had to answer the question. The question was: Whose fiscal policies would be more successful for rescue, recovery and reform during the Great Depression--Hoover or FDR? As it turned out, my best friend and I were the only ones in the entire class to argue that Hoover's laissez faire approach would have serviced the country better. The main argument was that the US has had a few depressions and recessions before and recovered. Not to mention WWII being an excellent economic stimulant. US did recover and "better trees grew." Believe it or not, we received "B's" and the rest of the class received "'A's." The history teacher actually lived through the Great Depression. Her argument was: you had to have been there. Some of FDR's reforms were good, especially the FDIC. One of his recovery programs still exists today--the TVA. Today, the government is more aggressive with the Rescue phrase (maybe late to the scene as always), except the rescue isn't directly affecting the US citizen. Hence the recovery phase--job creation by the Federal Government. Many reforms have already taken place, so we will see.
The problem is that the Forest Service has suppressed fires for so long that an enormous amount of underbrush has collected. If the fire happens now, it will be much worse than it would have been and it would be so hot that it would take longer for new growth to happen.
In the US we've perpetually had policy interfere with free markets. If you took a snapshot to mid-2006, everything seemed fine to Americans (minus notice of an obvious bubble). To turn on the spigot of destruction and let havoc wreak would just not be consistent with our past actions. Creative destruction doesn't care what it destroys. Under the same logic, war does what forest fires do. It solves population problems every so often. With that same concept, if you believe human endeavors should be treated with the same primitive approach as forests, then you believe that extermination of millions of people (China, Japan, Africa, Europe, etc) throughout the 20th century was necessary for population control, and that we need to exterminate another billion or two just to get a handle on things. I don't buy that. I think the whole goal of advanced society is to achieve stability in economy, population, quality of life, etc. without requiring these 'forest fires.' That comes from self regulation ... central banks, governments, policy, etc all attempt do these things, and I think at the most ideal level exist with the idea of preempting disaster. At least they should try. Otherwise, how far do you want to go with your creative destruction? In the end, it means war, anarchy, chaos, and human misery (involving many people who never do recover). Central bankers and corrupt governments may being doing more damage than good - that is merely a result of the combined present state of human nature, and the state of the current technology level of finance and economics. It doesn't change the fact that we as humans should still try to do our best. In 200 years, just as technology of electronics will likely be more advanced and efficient, the same will likely be true of that of economics and government policy. The Austrians want their cake (totally free markets) but with the stability that civilized government provides (via some level of observance of law and monopoly protection). Totally free markets inherently lead to equilibriums that often piss off the masses, deprive them of basic necessities, etc because in reality, Darwinistic evolution plays itself out in capitalism. Naturally, few winners and masses of enslaved peons perpetually appear. Just look everywhere in the world -- communistic equality is not natural. The gap and distribution between the winners and peons always varies, but nonetheless free markets don't stick up for the little guy. I think the whole point of advancement of human thought and endeavor is to find the best middle ground that avoids the need for creative destruction. Maybe it is possible, maybe it is not, but I am certain of one thing - a metaphor I construct to illustrate the point of human possibility: the music of Bach came out of the seeking of order through many generations of improvement... Without a system where we seek order, we are in Africa. See how well creative destruction has worked for Africa?
I think there's more dynamics at work on that continent than you're taking into account. 1 of which would be, for the most part, those in the middle and southern parts of that continent like killing each other on a much grander scale than we can imagine.
It would be fine if the government was responsible enough to interfere with the market when it was obvious there was a housing bubble and it was obvious that no-doc loans were scams and it was obvious that many people were going to be upside-down on their mortgages with no chance in hell of paying them off. But the government isn't responsible enough to do this, but now it wants to limit the downside? It is complete b.s. If you aren't responsible enough to regulate the b.s. on the way up, you shouldn't be allowed to regulate the b.s. on the way down. And besides, it won't work anyway. Let the markets do what they are designed to do - cull out the weak. By the way, equating war to markets is a bad analogy.
Do I detect some naive religious belief of automatic reversion to a desirable mean? I ask you, here of all places there are people who argue that markets react rationally, that the stock values are actually a true reflection of the fundamental business model, management and long term prospects of a given company, rather than fear and fancy. Play a little game where the guy with the best poker hand gets to make a rule each hand. How many games does the player with the initial best hand loose after that? That is essentially the benefit that wealth confers, the ability to make the rules. The only stricture to this is the strength of the idea that overall actions should be constrained to be for the common good, a la Teddy Roosevelt. The common good has been out of favor in the US for decades. We have cravenly accepted the right of each of us to clear cut everything that we could cart away just because we could because enlightened self interest would cause us to keep our perfectly legal behavior within sustainable bounds. Right! Yeah. How did that work? So what is left is a desert.