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

“What can’t be stressed enough about what happened in 2008 is that for economies to grow and markets to rise, it’s necessary that the mediocre and lousy constantly be replaced by the good and brilliant.”

Real Clear Markets, reflecting on the decade since the bankruptcy of Lehman Brothers.

(Hat-tip, Stephen Green of Instapundit.)

10 comments to Samizdata quote of the day

  • llamas

    Absolutely spot-on – and (puts on old-fogey hat. Get off my lawn!) remarkably-reflective of some of what was being said here at the time.

    Government action to ‘stabilize’ markets and ‘save’ businesses will always have a retarding effect on growth and development (because it supports and encourages what is failing, instead of what is coming in its place) and an amplifying effect on the failure itself (because it supports what is failing, and thereby prolongs it).

    Incidentally, this is just as true for some of the silliness being perpetuated by the Trump administration, such as the tariffs to ‘save American jobs/ save American industries.’

    llater,

    llamas

  • Over the ages, for obvious reasons, there has been a general tenancy for large organisations to be both more efficient and to be less flexible to changing circumstances; and obviously government is the epitome of a large organisation. In necessary equivalence, there is a general tendency for small organisations (which unfailingly exclude government) both to be less efficient and to be more flexible.

    Accordingly, we (the thoughtful and concerned for the longer term – even, some might say, the wise) need to look to the large, the small and all steps in between: to obtain the best from those combinations of large-scale efficiency and small-scale flexibility.

    This adds to those processes ‘judging’ the need for the mediocre and lousy constantly be replaced by the good and brilliant.

    Best regards

  • bobby b

    I wish that Tamny had spoken more explicitly about the roles of Fannie Mae and Freddie Mac and HUD in the crash instead of talking about hazy concepts of government over-regulation.

    But, overall, a very good piece of writing.

  • Julie near Chicago

    bobby, go hear what Richard has to say. Not a fanatical fan of F&F, nor of getting the banks to go along with loser mortgages either.

    (I’m positive you know, but I never let certainty get the better of my native paranoia:

    (Check “The Libertarian” podcasts at hoover.org;
    several UT’s; a few at Cspan.org;and a few older EconTalk episodes with Russ Roberts.)

  • bobby b

    Thanks, Julie. Bookmarked, and will watch when I get home tomorrow.

  • Johnathan Pearce (London)

    Julie, thanks for the link.

  • Paul Marks

    What happened in 2008 was that a vast Credit Money Bubble (created by the normal alliance of government and bankers) burst – but rather than allowing the “financial system” to go, governments pumped in vast sums of money.

    The system is as bad as ever (if not worse), nothing has been resolved.

    As for lending – the “financial industry” clearly finds lending our REAL SAVINGS (the actual sacrifice of consumption) boring, they prefer to “create Broad Money” (Credit Bubbles) and governments back this every-step-of-the-way.

    Japan shows that a “zombie banks” and a whole “zombie financial system” can be kept going by government subsidies for DECADES.

    All that is needed is for governments (and other such) to not care that they are subsidising the rich at the expense of the poor – via systems that Richard Cantillon was the first to denounce (some three centuries ago now).

  • Laird

    As llamas said, many of us were saying exactly the same thing at the time. It might actually be worth all the pain we went through in those years if the lessons described in this article were learned. Unfortunately, they were not. We are doomed to repeat this over and over again.

  • […] support, and many of the forecasting errors of a decade ago remain unliquidated. As others have noted , just as when a tree falls the light let in through the canopy allows new […]

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