Comments on: A chill in the air

By: Mike

Mike — Fri, 26 Dec 2008 11:43:17 +0000

I’ve always felt as if I would have enjoyed life a great deal more if I were born 100 years sooner, before everything productive or fun was outlawed.

By: GG

GG — Thu, 25 Dec 2008 07:24:06 +0000

I am so tired of even just living right now. Feels like a darkness is descending upon humanity. I would rather be born when there is more freedom in the world.

By: Aleks

Aleks — Sun, 21 Sep 2008 13:41:39 +0000

Yes.

“God, give us grace to accept with serenity
the things that cannot be changed,
courage to change the things that should be changed
and the wisdom to distinguish the one from the other.”
- Dr. Reinhold Niebuhr

By: Mike

Mike — Sun, 21 Sep 2008 05:00:21 +0000

Alex, the government has guns. This is not a free competition.

“Government is not reason; it is not eloquent; it is force.”
–George Washington

I think I have made the point many times over that this is not a market failure. This is a government failure, a socialist failure. Markets provide everything that government allows them to and lots that it doesn’t.

By: Aleks

Aleks — Sat, 20 Sep 2008 20:20:31 +0000

Mike, yes, I agree about the causes. I understand how the government might seek to implement things that the market wouldn’t, but I’d prefer this to happen at the level of information sharing rather than at the level of insurance policies.

But let’s be realistic: a democracy expects things from the government if the market doesn’t provide them. So, if you’re a free market enthusiast, you need to solve problems so that the government doesn’t have to. The free-market-preservation society has to be entrepreneurial and preemptive, outcompeting the government.

By: Mike

Mike — Sat, 20 Sep 2008 14:51:40 +0000

Dima — Most of the reason for that is that the first 3/5 of the US move (600+ Dow points) came in the last 90 minutes of trading on Thursday when the markets were closed in Europe and Asia. Our move (1000 Dow points in only 3 trading hours!) was spread over 2 trading days whereas theirs was all in one day.

By: Dima

Dima — Sat, 20 Sep 2008 14:42:02 +0000

the action in US was very different from europe and asia
although there was no reversal we finished well below day highs

By: Mike

Mike — Sat, 20 Sep 2008 10:19:06 +0000

Zulu – Good to have you here.

Mike

By: Mike

Mike — Sat, 20 Sep 2008 10:16:37 +0000

Thanks Alex.

It’s important to distinguish what we have had in the US from true free market capitalism. This crisis is no ‘market failure,’ but precisely the opposite: a collectivist failure, thanks to socialist mechanisms like deposit insurance and a central bank which induce bankers to take risks that a free market would not tolerate.

In a free banking market, depositors would keep bankers honest and conservative by selecting only those with sound lending standards. The fear of runs on the bank prevents bankers from getting punch drunk.

Also, a free currency market (like the US had in the 1800s, with no legal tender laws and no monopoly in money issuance) has always converged on gold and silver as money, since their value is universal and not determined by government edict or bankers’ schemes.

By: Aleks

Aleks — Sat, 20 Sep 2008 10:01:25 +0000

Great post! Having lived through the fall of communism, I remember well the people who worked and the mass that didn’t work, but everyone had to split up the fruits of the labors evenly. The culture remains: people have trained themselves to be freeloaders – who try to stick around those who do work, but don’t pull equal weight. And the general spirit is that of expecting the government to take care of everything while ridiculing it.

In the US, I think people have seen many good people who didn’t get the opportunity. And this is turning them away from capitalism. The flaw of capitalism has been to neglect merit and to create an aristocracy out of professionals. This is now backfiring. People, especially simple people, like to generalize – they will blame the group for the misdeeds of the few. And any group has to protect its honor by taking internal discipline and punish those who are responsible for the excess (rather than bailing them out).