Angus points out that advocating good policies that are impossible is bad.
As a balance, I submit that it is also unfortunate when we are told we need to pursue bad policies that are unfortunately all too feasible.
In this article...well, check it out.
My own favorite 'graf:
Had the central bankers of the world understood that inflation in asset prices could be just as bad as, if not worse than, inflation in the prices of consumer goods, this would not be necessary. But they did not. So they did nothing to resist soaring home prices, just as they had seen no reason to worry about the Internet stock bubble.
Golly sakes alive, Jasper; where to start?
1. "Understand"? The asset bubble was largely an intentional consequence of monetary, regulatory, and tax policies of the federal government. It was not a thunderstorm, something that just happened randomly. It was a POLICY.
2. The fact that incorrect asset prices resulting from government policies on money, interest, and taxes cause asset bubbles is one of the central tenets of the Austrian Business Cycle theory. I myself have always been skeptical of that theory, but it accounts for the events of 2001 - 2010 beautifully and quite accurately.
It's not the bust. The problem is the freakin' boom. And the idea that inflation solves the bust is just askin' for another boom.
2 comments:
Mungowitz asserts the "asset bubble was largely...consequence of monetary, regulatory, and tax policies..." Quite so, but a liberal (NYT!) can no more contemplate such a proposition than a fundamentalist can consider "there is a contradiction in the Bible". For the liberal, all bad things stem from greedy rich people (except actors & athletes). Thus the NYT is being uncharacteristically mild when they allow that the bubble "just happened".
Please make a 'grand game' out of this Krugman nonsense:
http://www.mrctv.org/videos/paul-krugman-calls-space-aliens-attack-earth-requiring-massive-defense-buildup-stimulate-economy
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