Samizdata

From the Spectator:

If you had purchased £1000 of Northern Rock shares one year ago it would now be worth £4.95, with HBOS, earlier this week your £1000 would have been worth £16.50, £1000 invested in XL Leisure would now be worth less than £5, but if you bought £1000 worth of Tennents Lager one year ago, drank it all, then took the empty cans to an aluminium re-cycling plant, you would get £214. So based on the above statistics the best current investment advice is to drink heavily and re-cycle.

This is from two weeks ago, so adjust for the financial turmoil since… the advice still stands.

My favourite commentary on all the financial mayhem of the last few days and hours is this, from Scrappleface:

“To sustain this shining city on a hill,” Mr. Bush said, “we need to rescue the ignorant, irresponsible folks – from Wall Street to Capitol Hill to Main Street – who got us to where we are today. We must guarantee that no American suffers the soft bigotry of being forced to live with the consequences of his bad decisions.”

The president, in remarks to the news media clearly aimed at reluctant Republicans in Congress, said, “Our financial system rests on a foundation of huge banks, brokerage houses and quasi-governmental agencies that followed Washington’s lead by gambling on long-shot, poorly-collateralized investments. Now this glorious way of life is threatened, and we must act to preserve it.”

“We need to guarantee that the structures, systems, people and products that got us to this point won’t be tossed on the ash heap of history,” said Mr. Bush. “If these giant companies fail, then America will be left with nothing but thousands of small to mid-sized financial firms that made prudent investment decisions during the past 15 years.”

I’ll skip the next paragraph, if only so that I can say read the whole thing without having already stolen the whole thing, but the final paragraph demands inclusion:

“It is a moral imperative that we guard the civil rights of these idiots,” he said. “If we fail, then we face the specter of free market capitalism run amok, and millions of Americans will feel the painful lash of personal responsibility across their backs.”

One of the reasons I like this is because it makes me laugh, while at the same time allowing me still to be Thinking About It All, rather than just escaping into pure escapism.

One thing I do strongly believe (“know” would be putting it too strongly) that is relevant to all this mess is that the Great Depression was not caused by the Wall Street Crash, but by the mistaken things done before and after – especially after – the Wall Street Crash. To say that the Crash caused the Depression is that old folly of blaming the messenger for the message. It is now clear to us all, to those to whom it was not clear at the time, that the mistakes made during the previous few years have done a lot of damage. But I fear that the mistakes being made right now will prove even more costly.

And if I had to decide about all this, right now, knowing only what I know now, I’d say: let the market now do its job. The economy has been fatally mixed in recent years. Unmix it. If you have just lost your shirt, the taxpayer won’t buy back so much as a button for you. Yes, cruel, and I certainly wouldn’t say that every shirtloser has been stupid, as Scrappleface’s Presdent Bush does. And such cruelty is certainly not how you win elections. But far more cruel would be (will be?) changing the rules of the entire game for the worse.

Update: Von Mises Institute Bailout Reader.