Beginning the next 50 years with a new economic system.
If this market crash was not entirely predictable, it is eminently predictable that everyone will search for a scapegoat. Not that I would defend Alan Greenspan, who did more than anyone to promote these castles in the air, but he didn’t invent these Ponzi derivatives, nor did he force millions of speculators and greedy investors to traffic in them.…
Article comments
26 - Les Slater
Clavos,
"Eliminate the laws prohibiting their sale and use, impose heavy taxes (to discourage initial use), and enact licensing and registration requirements for dealers, as well as regulations governing and monitoring sales. I also wouldn't be opposed to the government subsidizing addicted users."
Sounds like you're advocating that the fed and other government institutions be given much greater power over financial transactions plus an openness to subsidizing the banks, brokers, even homeowners and credit card borrowers.
Les
27 - Dr Dreadful
I totally agree with Clavos.
You'd eliminate most of the world's crime at a stroke, and liberate staggering amounts of law enforcement dollars that could be much better spent on other things.
28 - Les Slater
Doc,
Drug business is a big business, a capitalist business. I try to point out that Clavos treats the drug business differently than he would treat business in general. He calls 'prohibit' a bad word. I presume in his scheme of things he would prohibit murder.
I point out that capitalism is bad for the health and well being of most of the population. In his 23 he provisionally concedes, "...they don't 'produce' anything that contributes wealth to the rest of society?" He is just against 'prohibiting' anything, ugly word.
My 24 tests his reasoning by applying it to the illegal drug industry. He ducks it with his point 2 of his 25. This has some merit.
But his prescription for dealing with this industry, if he were consistent, and applied it to the financial industry, we might conclude that he would agree with my 26.
His problem is he treats one group of criminals with kid gloves, while recommending stern, and effective measures to another group of criminals and their victims.
Les
29 - Baronius
Creativity, in this sense, includes creating identical tires on a production line. I'm not just talking about artistry.
And Les, if members of the financial industry siphons money from productive uses to unproductive uses, they'd go out of business like anyone else. The market punishes failure by the same means that it rewards creativity. The only institution that siphons money from productive uses to unproductive ones is the government, which is the one institution you support.
30 - Clavos
Sounds like you're advocating that the fed and other government institutions be given much greater power over financial transactions plus an openness to subsidizing the banks, brokers, even homeowners and credit card borrowers.
Nothing I said implied any of the above, I was responding to your postulate in re the drug business, not any other industry. Nor do I accept your stretching my comments about drugs to say that they apply to any other business. Such was most emphatically not my intent.
31 - bliffle
I heard on the news that GM is asking the USA for $10billion to finance a purchase of Chrysler.
Why should we subsidize a takeover that is so adverse to the economy?
32 - Dr Dreadful
Are they kidding? If GM can't even afford to buy Chrysler by themselves, how do they propose to afford to run it?!?
33 - Christopher Hoare
I'm really pleased to see so much discussion prompted by my article.
To inject another aspect to consider, take a look at Der Spiegel online English site today.
The system has failed, not merely confidence, which was misplaced.
34 - Baronius
I'm surprised the BC market interventionists don't love this GM/Chrysler idea. It's huge, reckless, and runs counter to all market forces. It's exactly what happens when people decide that a thing is worth other than what someone is willing to pay for it. But what do I know? I'm sure a government committee can valuate that buyout correctly.
35 - Dr Dreadful
What BC market interventionists, Baronius? From what I've seen, even the left-leaning writers and commenters on BC seem to think the bailout is a terrible idea.
This stunt would be unthinkable under normal circumstances. In the current climate, though, I'm sure GM thought it would be at least worth a shot. Gotta give them some credit for sheer chutzpah.
36 - Baronius
Dread, this whole article is about market intervention. That's what people don't seem to get. Everyone's in favor of GOOD market intervention and opposes BAD intervention. (It's the same as on a different thread, everyone's in favor of restricting voters who are dumber or smarter than them.) The thing is, you don't get to choose. Once government has the power to determine who gets money, there's no difference between WaMu and GM. It's just a matter of negotiation.
Never mind the words "good" and "bad", I want to put this whole post in caps. Once you surrender rights to the government, they're not yours any more. You don't get to decide what an employee is worth if there's a health care mandate. You don't get to pay extra at the pump with an SUV, because they're off the road. You don't get to choose your college, your doctor, your 401(k), your trans-fat happy meal, or much of anything.
37 - Baronius
Forty-eight hours and no replies. Well, let me shout this one more time, as if the election depended on it:
Don't give away your rights. Don't sell them off because the current intervention seems benign. Don't allow redistribution of wealth because you think it'll run in your favor. All rights are connected. You're allowing power to accumulate, and next time it might not be used so beneficially. Generations may pass before there's an opportunity to buy your rights back.
Well, there you go. Maybe I'm talking to myself, or blithering, but that's what the internet is for, anyway.
38 - Dr Dreadful
All rights are connected. You're allowing power to accumulate, and next time it might not be used so beneficially. Generations may pass before there's an opportunity to buy your rights back.
Baronius, the agendas may be different, but what strikes me most about what you're saying is that this was exactly the kind of warning the left was shouting four years ago prior to Dubya's re-election.
Were they proven right? Will you be?
39 - Baronius
Provocative question, Dread. I think the best answer is that the president has always had a role as Commander-in-Chief, national security authority that widens and contracts depending on the situation. On the other hand, the sort of broad authority over the economy, as exercised by the Treasury and Fed, is hardly spelled out in the Constitution. This kind of governmental involvement has never, to my recollection, been rolled back except in limited cases like telecom regulation. Bush gave no sign that he'd be prone to it, other than comments about being "compassionate". McCain has shown a willingness to commit to big, sweeping compromises without much concern about their implications. Obama promises such things.