Month: September 2008

Sometimes Bobbing and Weaving Just Isn’t Enough:

McCain and Obama are tripping over one another to claim they have a PLAN. Everyone wants a plan to fix the financial markets. But the bottom line is that we do not need a government plan, we need a free market unhampered by government intervention. Instead, we are going to get government control, budget deficits and debt, and inflation in double-digits as the government attempts to pay for their inept policies that fueled the current and future crises.

EconLog, An Open Letter to Ben Bernanke, Arnold Kling: Library of Economics and Liberty:

We have excesses. Too many housing units. Too many “homeowners” who don’t have equity in their homes and never did. Too many banks and financial institutions. The excesses need to be worked out by the markets.

Washington Times – WILLIAMS: Stubborn ignorance
The ending quote is fantastic:

English philosopher Herbert Spencer said, “The ultimate result of shielding men from the effects of folly is to fill the world with fools.”

My grandparents lost their beach cabin in Hurricane Carla in 1961. After that, my family used my great uncle’s cabin in Gilchrist. When we were going to the beach, this is where we went. Each summer we’d go down for a week, with my dad commuting each day while we played in the surf near the pilings that surrounded the Dishman’s long-lost pool. David and I always looked forward to Bingo night at the volunteer fire department. As the years went by, the walk between the edge of the slab and beginning of the beach got shorter, until the installation of the geotube a few years ago halted the sands advance just a couple of yards from the deck. Until last week.

a view from a plane offshore:

The Austrian Economist: The Crisis in One Paragraph and Two Thoughts of My Own

Our friend Larry White at Division of Labor puts it succinctly:

On greed, let me repeat: If unusually many airplanes crash during a
given week, do you blame gravity? No. Greed, like gravity, is a
constant. It can’t explain why the number of crashes is higher than
usual. And let me add: This isn’t a morality play. What we’re
seeing are the consequences of monetary-policy distortions of interest
rates and regulatory distortions of incentives, amplified in some
degree by private imprudence, not the consequences of blackheartedness.

And what all of this points out is that laying the finger of blame on “the free market” is utterly in error, but it’s an error that’s going to get made continually over the months and years to come. If there’s one thing those of us on this side of the battle of ideas can do as this all unfolds, it’s to do whatever we can to remind people that the interventionist economy that caused the problems and led to privatized profits and socialized losses (and the “solutions” that will further socialize losses) are NOT “the free market.” Asking why anyone would think bigger government will solve these problems when it was the major cause is another public service we can provide.

Even though I firmly believe that the fundamentals of the US economy remain strong and that this is not the start of another Great Depression, it is disconcerting to be apparently living through the start of a round of the Higgsian ratchet.