This is a bit off my beaten path but I’ve almost finished reading Alan Greenspan’s autobiography. The first part is pretty much autobiographical but the second half is an interesting (and accesible even for a layman like me) discussion of economic policy topics. In the first half, Greenspan talks about his experiences with the “Black Friday” stock market crash that happened shortly after he was appointed Chair of the Federal Reserve.
Fast forward 20 odd years and we have a new chairman and a new economic crisis – the credit crunch. Bernanke seems to be holding up pretty well through the whole thing – he is making the right noises but the situation will likely to get worse before it gets better. Fortunately, I have a solution: if we never switch Fed chairman again, we won’t have any problems! Problem solved…..
Interestingly, the White House has released a statement about the credit conditions and they indicate that tightening credit conditions will not stall business expansion. I’m not an economist but if credit ain’t available then business expansion would seem to be in trouble. I would, however, be happy to be wrong.
December 5, 2007 at 5:32 pm
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December 5, 2007 at 8:26 pm
Interesting how some folks don’t want any government controls
in a market until that market turns south. THEN they want
Uncle Sam to act PDQ to clean up the mess and save their rear ends.
The subprime mess was predicted (Goldman-Sachs among many) and
could have been prevented. Does greed always trump common
sense? Bubbles Burst.
The old line is that people elect Republicans to save them from
Big Government and Democrats to save them from Big Business.
Which will it be in 2008?
December 5, 2007 at 9:26 pm
Have always liked Barbara Tuchman since reading her great book
about the medieval period in Europe – “A Distant Mirror” – so, when
I saw her name on the -“March of Folly”- at a library book book sale
it drew my attention. Among other events, it has several chapters
on the American Revolution from the British government’s side –
(What we know as the horrid Stamp and Tea taxes were their “user fees”
to support troops containing the Indians and French). Interesting-
one can see the flawed reasoning of the Crown and Parliament:
don’t listen to others, try and get by on the cheap, and bounce from
one bad idea to another – waiting for the colonist to put down
their “disordered optics” and regain their senses.
Through history , why do governments so often act
in ways that detrimental to best interest? “Several factors contribute
to folly, such as a leader following preconceived notions rather
than seeing the problem at it really is; pursuing personal gain rather
than the general welfare of a nation: and being ignorant of the culture
and people of other nations.” History has much to teach us if we
would only pay attention.