Interesting article Chris.

“After all, the current economic crisis was caused by inadequately regulated capital and financial lending”…

You say this as if it were an established fact. But your own experience should have taught you at least to question it, for several reasons.

If the current economic crisis is the unintended consequence of policies intended for socialist reasons to re-distribute wealth, would governments admit it, or even understand it? Or would they try to externalize the blame? If that were the case, which line would humanities academics tend to follow - even if we looked at no more than the fact that they are government-funded, which is to say nothing of their socialist history and worldview? So a modicum of critical scrutiny is called for.

To suggest that the current economic crisis “is caused” by inadequately regulated markets, is to argue that monetary policy had nothing to do with a monetary crisis. A whole panoply of government institutions is set up to do nothing but manipulate the supply and the price of money, but apparently, that has nothing to do with the demand for money. Curiouser and curiouser. Can you really believe that?

Government currently confiscates, directly or indirectly, about 50 percent of what the nation produces every day. Now we already know that total government control of the economy can only lead to total economic chaos and collapse, and a society of privilege.

So what is being asserted, is that
a) the enormous control over the economy that government exercises through many departments, and which consists of nothing but intervening to rig prices to be different than they otherwise would be, has got nothing to do with the cause of the economic crisis; and
b) there is an optimum solution by central planning of the economy at an unspecified point greater than 50 percent and closer to the point of 100 percent and totally unsustainable economic chaos.

Time to consider a more parsimonious theory.

The modern state in a nutshell: http://www.lewrockwell.com/blog/lewrw/archives/026167.html

How political manipulation of the money supply causes economic crises: http://mises.org/story/3128

Keep up your inquiries!

Wing Ah Ling

About your discussion of my stated words, “After all, the current economic crisis was caused by inadequately regulated capital and financial lending”…

I merely put it in to highlight aspects of concern by critics of liberalism. I actually don't believe it, although the system can always be improved.

Should have made that paragraph clearer.

I guess it's a bit like the Economics paper in the HSC each year:

The questions are the same questions. It's just the answers that are different.

The problem I have with neoliberalism is that the advocates tend to be ideological zealots who argue that the market can solve all of the problems of the world and that market = good and government = bad.
This is patently ridiculous.
We then get the puerile retrospective justifications which try to argue that black is white and up is down.
So, on the causes of the sub prime crash and the Global Economic crisis was not rampant greed and a lack of regulation and oversight, but Governments legislating to allow people who couldn't afford housing loans to make those loans. It was all the government's fault!

So what you see as truth i might see as spin and probably vice versa.

Shai

You are right with your statement "what you see as truth i might see as spin and probably vice versa".

However, I do not defend liberalism just on economic issues. I defend liberalism on its ability to promote a plularity of ideas and to offer an ideology that has universal appeal in terms of the potential benefit of freer trade for competing nations struggling to find and accept common international instutions. This is what I am about. I have never suggested that freer markets are perfect, even when I wrote for Quadrant.

Chris,

i wrote on another thread that the apologists for neoliberalism sounded like the apologists for communism:

Back in the 1960s and 70s these apologists were arguing that communism worked its just that it hasn't been introduced correctly yet.

What we hear now is neoliberals bleating that the reason that the market failed is that it hasn't been introduced correctly yet, that governments didn't allow the market to flourish free of government interference.

The absurdity of both positions is obvious.

Freeing up the market was a necessary reform that needed to occur. However it's a means to an end not an end in itself.

On my dentist's roof there is a sign: Capitalism is where man exploits his fellow man. Communism is the opposite.

The problem is not with right or left, but with the uncritical acceptance of received opinions. There are plenty of fools and fanatics on both sides of politics, but we have enough information now to make our own decisions about the things that matter to us. Anyone who wants to hold an opinion on something should be obliged to find out the facts about it first; that will immediately cut down the bile and hysteria by 99%, and we can then proceed from there.

Why not check out this two reference on the Truth Out site re the real (and always) nature of right wing politics in America.

And remember that the Quadrant crowd, and most people on the right of the culture wars, think that Fox "news" is a shining beacon of "truth" in comparison to the much despised "liberal" media.

Frank Devine writes gushingly of its virtues. Plus a couple of years ago I remember reading an essay from a top honcho at City Journal re how wonderful it now was that Fox "news" was making inroads into the bias's and influence of the much despised liberal media.

Glenn Beck and the Rise of Fox News's Militia Media

http://www.truthout.org/040909N

Such is the deeply primitive murderous emotion that informed the John Birch Society the Klux Klux Klan and USA right wing politics altogether. And the terror thus perpetrated by these dreadfully sane patriots against those on the on the left.

Which at one time or another included Jews, Catholics, liberal Christians, African Americans, and ALL non-whites, socialists, trade-unionists, feminists, liberals, atheists.

Meanwhile one influential "religious" conservative here in Australia was trying to get the government to urge the USA to use nuclear weapons against the North Vietnamese "communists"---such an impulse is deeply psychotic and genocidal in its intent.

'After all, the current economic crisis was caused by inadequately regulated capital and financial lending,...'

Prove it.

You cannot.

That was not the cause. The cause was meddling by the US Government in the so-called free market. ie the US senate and the introduction and use of penalty clauses forcing the banks to lend to people who couldn't payand allowing banks to insure and trade in mortgages.

If you had said this initial crisis in toxic lending was then driven by the greed of bankers, derivative marker dealers and invidual investors, and was accentuated by the meddling of the central bankers then you'd be more accurate.

But no the crisis was caused by interference in the free market, not by the operation of the free market. The regulation of trading in capital was inadequate and needs serious appraisal. But the lending was effectively regulated. It's just the the regulations (i.e. the aws and particularly the Community Re-investment Act and the relaxing of the Glass-Stegall Act) were stuffed and the free market just took advantage of these abominations ... which is how it's always worked.

Any talk of changing the whole system of how we trade and distribute income and capital is simplistic and a case of 'throwing the baby out with the bath water'.

Neo-liberalism hah! there is no such bloody thing. I haven't seen anyone define it in terms of anything other than simple capitalism. What we've had over the past 30 years is not simple capitalism, we've had Government meddling in free markets ... and they presently are still blindly and stupidly doing exactly the same thing.

I just appraise actions and comments these days and am reminded of one definition of madness .. to keep undertaking the same actions that lead to the same result while expecting some difference in outcomes.

Harping on a myth, keith. 80% percent of the toxic subprime loans were handed out by non-bank lenders which don't report to the government.

And where were the market gurus when it began? Did they protest? Did they use their market savvy to forestall the disaster? Nope. As P.J. O'Rourke wrote:

"Wall Street looked at the worthless paper and thought, "How can we make a buck off this?" The answer was to wrap it in a bow. Take a wide enough variety of lousy mortgages--some from the East, some from the West, some from the cities, some from the suburbs, some from shacks, some from McMansions--bundle them together and put pressure on the bond rating agencies to do fancy risk management math, and you get a "collateralized debt obligation" with a triple-A rating. Good as cash. Until it wasn't.

Or, put another way, Wall Street was pulling the "room full of horse s--" trick. Brokerages were saying, "We're going to sell you a room full of horse s--. And with that much horse s--, you just know there's a pony in there somewhere."

It wasn't an aberration. It's the free market at work. Throw it in the bin with communism and let's get on with building something better.

Wall st Catastrophic?

Almost forgotten now, is the role of the Rockerfellers in the US Federal Reserve as well as David Rockerfeller's role as founder of the wider based Trilateralists.

Yet must say now, it seems as the proven keepers of modern US capitalism, the Rockerfellers have lately left the role to the more reckless?

In the meantime we have William D Cohan's House of Cards, a tale of Hubris and Wretched Excesses on Wall St.

We have already heard in the news about Bear Stearns, a so-called very honest Wall St profitmaker with around $17 billion ready cash usually on hand.

But ten days later, we find Bear Sterns stony broke, the calamitious financial meltdown of 2008 having begun.

How this happened - and why - is the subject of Cohan's superb and shocking narrative detailing the end of Wall St's Second Gilded Age.

As backing for our previous rough bush country comments, it seems Rip, Sh't or Bust was pretty well spot on for Bear Sterns, like mug horse lovers placing bets at a hundred to one in race after race feeling sure to win in the end.

Following Cohan's minute by minute account of the momentous March ten days he wonders why it took so long for the Treasury secretary Henry Paulson and Federal Reserve Bank President Tim Geithner, for each to make statements about the biggest big company crash since the Great Depression?

But with those above in shock doubtless contemplating the horrors lying ahead, one wonders about the Rockerfellers, whom if the 1930s Great Depression is anything to go by, the Rockefellers had remained quiet, thus having many old stagers like us wondering whether the newer Rocker's are again playing the shrewdest game of all?

Politics and truth are almost oxymorons these days. As a student who passed two semesters of politics with credits without doing one days study, I was a worry to my lecturer, because I had like Chris Lewis lived through Menzies, Whitlam, Frazer and Hawke, and even Keating albeit I started a little earlier.

As I furthered my legal studies, it became obvious that truth no longer had any place in the law, and that politics had degenerated into a winner takes all brawl; With swinging door regimes, and an unholy alliance between Labor State governments and Federal Liberals. Without the checks and balances on political power, I became increasingly concerned that democracy in Australia would have a very limited future. I have been a student of Constitutional law, for decades. I remember long debates about the constitutions of a political party I was once a member of. As a systems engineer, and we should never forget the engineers, I always considered that it was important to find out where the blueprint came from, so that the system worked as designed.

Until I was able to marry my legal studies to their roots in the New Testament I was unable to make any sense out of either politics or law. I found that the fundamental system of government we inherited, derived from a system of finding the truth, and acting on that truth. The place where this truth was discovered was in a grass roots political meeting with twelve individuals as adjudicators, and a chairman, just like a debate at school.

The first step towards truth is language. Punctuation and capitalization change the meanings of language, and a basic understanding of English, is essential; After language honesty and integrity are probably the next most important. Politics is all about the collective mind. It has to some extent been overshadowed by personality cultism, and the one answer to all tyrants was the grass root political meetings that were mandatory, in England since 1297. Neither politics nor truth nor law has been the same since those meetings were replaced by a single lawyer

What we need from you right now, Peter Believer, is how the world can get out of the political mess it's now in.

It's really now a testing time for thinkers, right now, mate, and as Christians it might be a good idea to go back to the Sermon on the Mount, rather than chasing the Christianity that gave away true compassion to not only copy Constantine, but later had to produce the fake Donation of Constantine to truly invade other countries as us Christians do now, telling lies about Perpetual Peace in the process.

It is so interesting in the wheatbelt where I spent most of my life, that the best families are or were the ones keen on sport, livng by the old saying to work hard and play hard, and it is so interesting how our Aborigines develop character through sporting endeavour.

And Muslims too are joining in, not even needing to change their religions, but fitting in well with the true sporting code.

Also in sport we notice how a good umpire can bounce the ball after a really rough ruck, bringing out the old philosophy of Sharing the Blame, which Barak Obama is obviously trying to achieve.

I guess the trouble with sharing the blame is that it relies on feelings, while faith relies too much on the Thou Shalts, so rather than Faith, Hope and Charity, better just Hope and Charity and leave Faith till last.

We all need this change so much.

because a good sportsman whatever colour will learn never