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Not enough collapses

I like this article by Tim Cavanagh over at Reason’s Hit & Run blog:

This is the problem with the new declinism. With no compelling vision of the apocalypse that doesn’t involve zombies, cyborgs, or outlaw bikers, we tend to miss something obvious: The problem isn’t that things are collapsing. It’s that not enough things are collapsing. General Motors, AIG, and the government of California have committed enough errors to merit immediate extinction, but there they still are. Yet the political establishment continues to argue that the market needs to be prevented from delivering rough justice to sinners. President Obama, who one year ago gave us a worst-case scenario in which an unstimulated economy might hit 8 percent unemployment by this year, now presides over 10 percent unemployment but tries to bamboozle us with counterfactuals like this doozy from the 2010 State of the Union address: “If we had allowed the meltdown of the financial system, unemployment might be double what it is today.”

He’s making a good point. Much of the current mess has been caused by policymakers, such as Greenspan/Bernanke at the Fed, or our own benighted Gordon Brown, trying to “rescue” a failed system by throwing huge amounts of money into the system to prevent disaster, only to build up even greater woes in the future. Going bankrupt is never nice, but by freeing up resources and more to the point, by making people learn from their mistakes, it is a healthy process. To borrow from Karl Popper, if we don’t allow bad investment theories to be falsified by events, then the market will fall short in one of its most powerful functions, of generating valuable new information.

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12 comments to Not enough collapses

  • Several years ago, I wrote to the World Wildlife Fund (WWF as was) in response to one of their increasingly frequent mailshots pleading for a charitable contribution.

    This was to recommend to them, the naturalness and appropriateness of the evolution of species (including that bit on extinction).

    They replied (a surprise) and politely, though not with acceptance of my recommendation. However, they did take me off their mailing list.

    How do you get off the government’s mailing list? Maybe, if enough of us found out and did it, such problems as mentioned in the main posting would go away.

    Best regards

  • Laird

    “How do you get off the government’s mailing list?”

    LOL. If you figure that out please let the rest of us know!

  • Nuke Gray

    If you die, governments tend to lose interest in you. Whilst this is a drastic step, no-one who has done it has been heard to complain about the results!

  • If you die, governments tend to lose interest in you.

    No they don’t, not in Chicago election time.

  • Gabriel

    Not that Karl Popper would endorse that statement, at least if Open society is anything to go by.

  • Nuke Gray

    Alisa, I did write ‘Governments tend’. Plural term, and it was a tendency, not an iron law. If one government goes against a trend, the general idea is still true!
    Stop being such a Nick-picker!

  • Laird

    Umm, that’s “nit-picker”, Nuke! Happy to help.

  • Laird, you nit-picker, Nuke’s real name is Nick:-)

  • Laird

    I suspected that there was a story behind your exchange. You got me.

  • From a covert nit-picker to an overt one: he capitalized it too.

  • Laird

    I am duly chastened.