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]
|
Keep ‘bailing’… for all the good it will do you ‘Bail-out fears hit banking shares‘ howls the BBC… “We know of no justification for the fall in share price. We are fully aware of our regulatory obligations and we have not said anything,” said a Barclays spokesman in a statement.
Hehehe. Could it be that more and more people do not believe the shit that government and the mainstream media keep peddling any more? The ‘bail outs’ are consuming a larger and larger proportion of the world’s ailing economies, with no end of ‘bailing’ in sight. Frankly why not bail out the porn industry? Why not ‘bail out’ every damn industry! Just print more money!
The system is devouring itself and no amount of manipulation can change that… because manipulation is why the system is collapsing. When the correcting mechanisms of markets are not permitted to work, it is like never allowing forest fires to clear out dead wood. In the end all you do it store up problems for later. Guess what? Later is now.
Let it burn.
|
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.
|
Brilliant, as usual. I tend to be a lurker, not having much at all to offer to the valid opinions — yet, I was just discussing this with an uncle today. In order to reign in a struggling economy, the solution is never to print more money and thus devalue it… the solution is to let those businesses who made poor decisions reap the benefit of those poor decisions. Simple economics, right??? And I only paid attention about 10% of my single-semester, grade-school economics class! I digress. I agree with the last sentence… instead of bailouts, here’s an idea: burn about a third of the money. Woah! Suddenly, currency is worth a shit, and people will start to “actually” work for it…. amazing. That’ll be $768,821.93, please.
Absolutely. I have almost insatiable hunger to see the incompetence of central and commercial banks laid bare in a national audit, unpicking the damnable web of collateralised debt obligations and default swaps which landed everyone in this mess.
I’m increasingly dismayed by the servile, fatalitistic attitude of the people of this country, still trusting that government will just moderate the crisis, instead of demanding a thorough cleansing of the banking sector.
And I want so see a new generation of banks and mutual building societies emerge from this debacle with radically revised business models to suit – the quicker the better.
Is it melodramatic to demand punishment for such gross strategic miscalculations? I don’t think so…
It helps if whenever you see the term “fix” used in describing what’s being attempted with the market, you replace it with the term “distort”.
It must be around two years ago that I started to bore other commenters…and, doubtless, the management with this question:
I would have thought that the current meltdown would do the trick…but clearly not. Just how much worse does it have to get for the blinkers to fall off?
Utterly, utterly incredible.
I had a little old man round to fix my tumble drier today, that the wife had inexpicably fucked up in a freak accident.
He’s been before( he’s in his early 70s) to fix stuff.He’s a spanner and oily rag man, with a can do attitude.
Back then he happily took a cheque, today he asked for cash.
I happily paid him (I trust his workmanship you see).
We had a chat about this, and he said he had been employed every day of his life since the age of 14 and never taken a “Benefit” in his life. Always paid his taxes etc etc, but this was the bloody end!
Stuff the Government for giving my money to the undeserving dole scroungers he said, I’m not stopping working, but I’m stopping working for the fucking Government!
Times they are a changing!
I’m sorry…you’re going to have to explain this to me. While I agree that a lot of the blame for current problems can be sheeted home to banks making, with hindsight, foolish decisions, I struggle to understand how trying to ameliorate the knock-on effects can be condemned so easily.
Say company “A” has taken on more debt than they can handle in these times of de-leveraging (debt that the banks may have been very happy to lend to them before the credit crisis) goes bankrupt; and puts its suppliers into financial difficulty because of unpaid debts. These supplier companies then will be facing bankruptcy through no fault of their own. Granted, it is a tough world out there, and hard times can happen to anyone anywhere for whatever reason and this does not in itself merit financial support from the Government.
But if financial failures are threatening large parts of the business world and large numbers of VOTERS are facing hard times, then the Govt stepping in seems reasonable. These bail outs are not bailing out the companies that should be going broke, they are in effect bailing out their creditors and trying to allow the world to keep on turning.
I’ve seen this site and others, even lefty sites, condemning the bail outs. I know that Govt interference usually ends in tears, but in this case I remain to be convinced that the alternative would be better.
Also, doesn’t devaluing the currency, and thereby the value of the debts, amount to a good thing, in the short term?
Nope. If a bank goes bust, its assets (i.e. good debts… bad debts are not assets, they are liabilities) do not vanish down some black hole, they get snapped up by a more solvent institution, in the process making that viable institution even more viable. However this is not actually about ‘blame’ (more is the pity or certain people who be hanging from lamp posts) but about a massive systemic problem called ‘regulatory statism’ that stops self correcting market mechanisms from working until the problems get huge… the ‘innocent’ casualties are regrettable but that is the price we ALL pay for allowing the system we play in to be rigged and for year after year voting for easy options that put off the pain for later… and later is now.
The government is not keeping the world turning, it will keep turning regardless, only with different players. Moreover the reason many banker got into trouble was politically driven incentives to lends to people who should not have been lent to in the first place. I realise millions of people who benefited from things ike Fanny Mae do not like being told they are part of the problem, but they are and I am all out of sympathy for everyone.
Likewise car makers going bust because they cannot control their costs (in no small measure because they are hostage to politically connected unions). No one here are innocent victims, they are in no small measure the authors of their own misfortunes or at the very least paying the price for the political system they tolerate. It does not mean cars will no longer be made, just that they will be made by people with a competitive advantage, which is surely better for all sorts of reasons.
But the HUGE point you seem to be missing is that the money for these bail outs has to come from other people, the net contributors to the economy.. And by devaluing the currency, people who have acted with prudence are penalised, their saving devalued, whilst those who have acted irresponsibly are rewarded. Can you not see the long term systemic damage that must do? Trying to fix the rigged system by rigging it a bit more is just digging the same hole deeper. Moreover expecting the same people who screwed it up to suddenly get it right, when in truth there *is* no ‘right’ way to rig the economy and distort markets, seems perverse to me.
The brutal truth is to fix things, the changes need to be to the political system, not the economic system. There is no short term fix, it is going to crash and burn regardless and all these bail outs will just make the crater wider and deeper… kind of like the way government action did in the Great Depression. Oh joy.
They are already printing money. I remember reading (Chris Dillow’s Stumbling and Mumbling site I think) that broad money is increasing by about 16% pa. Ultimately this will inflate the borrowers out of trouble since they will be able to pay off their debts with pocket change, assuming they can still buy any clothes with pockets. Savers and the self reliant are going to be the ones that are really screwed meaning that there will be less of them next time around since we are going to learn that the state helps out those safely dependent on it but punishes those that commit the sin (to the state’s view) of self reliance.
You’ve hit the nail on the head, Mr. de Havilland. What we are seeing is a system of totally unsustainable growth finally break down, which was inevitable all along. It’s not just similar to a Ponzi scheme. It is one. And like all Ponzi schemes, the prosperity driven by monetary inflation and ever lowering interest rates was doomed to failure because it is unsustainable. Hmmm…. creates an entirely new context for viewing the ever popular drive for “sustainability.”