Boom and Bust
"That the dot com and housing hyper-inflations transpired within a period of ten years, each creating trillions of dollars in fake wealth, is, I believe, only the beginning.There will be and must be many more such booms, for without them the economy of the US can no longer function. The bubble cycle has replaced the business cycle."
Eric Jantzen from his essay,The Next Bubble; priming the markets for tomorro's big crash. It's instructive to listen to all the candidates spin the issue of the "not-quite-a-recession", not wishing to disparage capitalisms basic premises,while looking for fall guys to whack on the latest crisis. Allen Greenspan. Ben Bernanke. Unscrupulous lenders and irresponsible borrowers, the Chinese, my dog ate it, I got it off the toilet seat, yahda yahda.
It's all Chicago School "free-marketeering" (they should have a club and little hats with big ears) when the bubble is being blown, the glorious nature of the Invisible Hand and all that rot but as the air suddenly goes out of these giant Ponzi Schemes and the peasants start reaching for their pitchforks all the Big Players turn to government bailouts,deficit spending, Central Bank intervention and "capital infusion" by our good friends the Saudis. Help Mr.Wizard! The moron brigade over at the Republican Debate certainly inspires confidence. How do China,Japan, S.Korea feel about owning hundreds of billions of quickly depreciatiating dollars and hearing Fred Thompson call for lowering interest rates and extending the tax cuts?
Now that the US no longer makes anything but still demands the right to buy everything, the cash has to trickle down from finance, insurance and real estate. In other words, speculative wealth. Look at all the Growth! Isn't it a fine Bubble? Eighteen holes and lunch at the Club!
posted by troutsky @ 10:27 AM
8 comments
8 Comments:
Do you know any country that became an industrial power, by using the Chicago model of privatization, free trade and tax cuts?
Ren, protectionism is only ok when we do it, then "kick away the ladder."
Do you know any country that became an industrial power, by using the Chicago model of privatization, free trade and tax cuts?
Hong Kong, Taiwan, South Korea, Singapore...
It's all Chicago School "free-marketeering" (they should have a club and little hats with big ears) when the bubble is being blown, the glorious nature of the Invisible Hand and all that rot but as the air suddenly goes out of these giant Ponzi Schemes and the peasants start reaching for their pitchforks all the Big Players turn to government bailouts,deficit spending, Central Bank intervention and "capital infusion" by our good friends the Saudis. Help Mr.Wizard!
Funny reference, but you're assuming that American society is more capitalist than it is. Capitalism has its problems, but they can't be exposed by an American recession.
As Ron Paul has pointed out time and again, deficit spending, due largely to the war in Iraq, has caused the Fed to inflate the money supply, causing inflation and the recession that no one wants to discuss. We're having a hard time seeing the Invisible Hand because the danged Government Hand is in the way!
as far as Ron Paul and libertarian mutualist free markets I think you have to be prepared to accept the brutal fluctuations and periodic crises that go with it.A few winners and lots of losers during certain downturns has become unpopular and so we have intervention.
I think you have to be prepared to accept the brutal fluctuations and periodic crises that go with it.
Oh, most definitely. I'm about as anti-utopian as you can get. This idea that you can control everything, markets included, strikes me as both absurd and a bit frightening.
Sonia,
You need to check your facts! Hong Kong, Taiwan, South Korea and Singapore completely disregarding the "Washington Consensus" which is exactly how they became industrial powers. Privatization, free trade and tax cuts have all come since the Asian Crisis.
There is no "fake wealth." Wealth that appears fake is just wealth stolen, in plain sight, from others.
In one of my rare glimpses of TV, I saw a pretty good piece on how voters feel about the economy. An interview showed a formerly "middle class" skilled mechanic, now ill with liver disease, and losing his house. How does he vote? Straight republican.
False consciousness? Brainwashing? No, we must recognize that those who inhabit the power-mondey stratospher have really become "for the people." Think of it - in the 19th century, Frick and Carnegie would send troops to shoot strikers. Now...they negotiate. They want them to be happy, to buy their products. They really DO have the working man's interests at heart...but only so far of course.
I think this is why so many people who would be textbook democrats are republicans. With a little help from religious and chauvinistic obfuscation
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