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Will more drinks cure a hangover? : Comments
By Geoff Carmody, published 13/3/2009Observations about the global financial and economic 'correction' (a.k.a. crisis).
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There is no point searching for interventionist ‘policy responses’ of governmental ‘economic management’. They are what caused the whole problem in the first place.
The elephant in the living room is government’s manipulation of the money supply. According to Keynesian theory, this has nothing to do with the financial crisis – in other words, manipulating the price of money has got nothing to do with the demand for it. The crisis just mysteriously arises out of an excess of confidence that has nothing to do with government increasing the money supply, and for which the solution is more governmental meddling because government presumptively knows best. This is not economics, it’s voodoo.
The slide back to Keynesian policies bespeaks the intellectual and moral bankruptcy of the perpetrators. These policies are nothing but quackery. The idea that taking money from A and giving it to B will ‘stimulate’ the economy is what caused the original problem. And now their cure is more of the poison that caused the disease!
The utility of a road or other infrastructure is all the argument it needs. If we are doing it to create ‘jobs’, all it means is that the ignorant are willing to destroy more than one job to create one.
All government policies are attempts to keep prices at the level they were during an artificial boom created by government monetary policies. This is just more voodoo. You can’t repeal the law of gravity by throwing stuff up into the air.
The fact is, there is nothing governments can do to manipulate a better economic outcome, other than to shrink tax and government by about two-thirds. They could start by abolishing all payroll tax, income tax, and stamp duties; abolish all laws illegalise consensual productive activity (they have just smugly passed a new raft of them), and stop parasitising productive people to pay for a welter of programs of redistributionist privileges that make society both poorer and unfairer.