Certainly it is obscene to see governments defrauding the entire population and then channeling the proceeds to a clique of bankers and a claque of politicians. I am amazed that anyone can support this, but ironically both the left and right wings of mainstream politics do. Go figure.

Governments can get money by a) taxes, b) borrowing, and c) inflating the currency. All of these involve taking what someone else has produced. Before government can do any of these, someone must first engage in productive activity. This means that government intervention does not create wealth: it reduces it.

You are using the term ‘economic rationalism’ to abuse anything about politics that you don’t like and anything about economics that you don’t understand.

Hint: it’s not ‘economic rationalism’ when:
1. Governments forcibly take property from their subject populations through taxation and give it to
2. Organizations that have been set up by governments to re-distribute the propery they took, and
3. These government-created and funded organizations then give the property to governments of debtor countries. The members of these governments enjoy the benefits while passing the costs on to their subject populations.

This entire scam is caused by governments who, like you, have an agenda of forcible wealth re-distribution, and who believe that violating peaceful productive behaviour is virtuous.

The problem with cancelling the existing debts is that the institutions that are responsible for the offending behaviour are ready, willing and able to do it all again. The governments of the western world all tax their populations so they can give it in ‘foreign aid’ to ‘development loans’. The IMF and the World Bank stand ready to benefit from channeling these confiscated funds. And all the third-world governments stand ready to impoverish their own countries and enrich their cousins with the pelf.

Ideally, everyone involved in these corrupt transactions should be imprisoned. I’d like to see that!

But failing that, you should be calling for all those offending institutions to be abolished, rather than just asking for more of the re-distributionist thieving that caused the whole problem in the first place

This is an excellent article that explains where our priorities lie. I am with you on this as you have opened my eyes to new issues that I didn't know existed. Oh, I knew about the quick bailout they provided for the banks and stock market but I didn't know that for the debts of the developing countries, they have had to give up some concessions in order to erase some debts which of course left them more behind.

Evelyn Guzman
http://www.debtchallenges.com (If you want to visit, just click but if it doesn’t work, copy and paste it onto your browser.)

As an economist, I've never known anyone who argued "that untamed pursuit of economic growth and the accumulation of material wealth leads to a stable and fair world;" I think that reconstruction post-WW II was a greater economic crisis than now; and I know that the label "economic rationalist" is applied to those who believe that policy should be based on clear understanding of the issues and rigorous assessment of the costs and benefits of potential options; something to be supported rather than eschewed.

And I don't think that those in poor countries will be most affected by the crisis; on the contrary, almost all trade and financial flows occur between richer countries, and they will bear the brunt while life goes on as usual for most poor people, whose poverty tends to be related to kleptocratic and uncaring government rather than world trade.

Perhaps more specifics after (a frugal) lunch!

"Ideally, everyone involved in these corrupt transactions should be imprisoned. I’d like to see that!" - Diocletian

Not likely! The offenders' kin control the gateway to the prisons. Howver, one can hope.

Faustino,

1928-through 1929-1932 into WWII & now were different to the end of WWII. In the late '40s-'50s, GB and Europe were flatten, and, the US was one man show. Recovery required directions, such as the Marshall Plan, to create Markets for the outputs of new production. In the Great Depression their was the protection of local industries, leading to a contraction of World trade. Today we are protecting institutions, rather than let "the invisible had" do its thing.

Oliver, point taken, I was contesting the author's view that this was the biggest economic crisis since the 30's Depression, while the the post-war situation was not a result of poor economic policy, it was IMHO a much greater economic crisis than the present. I lived through it, though I wasn't an economist then!

Faustino,

Thanks for that.

Yes, post-WWII, the World was in a mess. England, because, it was the first country to enter the Industrial Revolution, also needed to address the existence of highly degraded public utilities and obsolete plant & equiptment.

Albeit, very tragic, the twin towers was nothing like the Blitz, Dresden or Hiroshima.

The is true to your point. Also, in 1944 (Brenton Woods)and 1973-4 (US Debt)very significant global trading and foreign exhanage adaptations were instigated.

Depression? I'm not sure whether we are there yet. Probably not. But, if this first round of Corporate support fails, Governments should not throw good money after bad.

The US, with its huge deficits, should not allow itself to prime a global subsidy competition, against countries, having trade surpluses and large currency reserves. If Japan, sells* USD to support its local industries, we could find countries in a tit-for-tat downwards spiral. Protectionism must be avoided.

*Yet, maybe, Japan would like to keep the USD high to protect USD FDI carried onto its (currency)consolidated Yen balance sheets?

(Off-line for a few days)

Regards,

O.