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Former Tenured Business Professor; co-authored APICS textbook on organizational change; math/economics/science teacher; serious investor since 1987; completed the professional Certified Financial Planner course and Financial Analyst Levels I and II. Post graduate studies in financial analysis.... More
  • Dance With the one that Brung Ya, Even if he/she has Two Leftist Feet 3 comments
    Sep 8, 2010 7:51 PM | about stocks: MOO, DAG

    Today Stiglitz, winner of the Nobel Prize for Economics in 2001, said austerity as a policy to end the global crisis was a "disaster", adding that Europe was heading towards more economic difficulties if politicians meant what they say when they promised to cut back spending rather than just trying to calm down markets.

    "If that (austerity) happens I think it is likely that the economic downturn will last far longer and human suffering will be all the greater," he said.

    Really...cutting back on government expenditures and public debt financing crowding out of private capital, would be a "disaster." So we have Keynesian stimulus to thank for this economic NIrvana we enjoy. Keep doing the same thing.

    I understand where Keynesinas are coming from...they are just wrong about where we should be going.MOnetary and fiscal policy got us here, leave the markets alone and the physician will heal itself.

    Again I say short fiat currencies and long hard assets, DAG, MOO for me.


    Disclosure: long MOO
    Stocks: MOO, DAG
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Comments (3)
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  • flight36
    , contributor
    Comments (4) | Send Message
    Really? Unfettered capitalism? Back to the good old days where greed ran amuck and robber barons threw out scalding pennies to watch starving children burn their hands. Hmmm.
    The Banks got us into this, just like the first depression, and we are going to have them to thank for the next one. Another Paulson and we are all doomed. Maybe some oversight and regulation that was actually implemented might be in order.
    3 Nov 2010, 04:52 PM Reply Like
  • bricki
    , contributor
    Comments (1096) | Send Message
    Yes unfettered capitalism, like what we had pre Roosevelt. It was grand to have a full-blown depression every generation.


    29 Jan 2011, 11:08 PM Reply Like
  • hayekvonfriedman
    , contributor
    Comments (1112) | Send Message
    Author’s reply » 1) We haven't had unfettered capitalism since Roosevelt, Teddy. Wilson and Coolidge werte already socialists in the making.
    2) Greed is part of human nature, Marxists have it really bad. Best harness it rather than deny it in which case it will obey the laws of chemistry and physics and the pressure will flow down the gradient or blow at the weakest link.
    3) The thesis for the back row Ivy leaguers was Stiglitz's assertion that austerity was a "disaster" is nonsenses: unsupported in fact and logic. Liberals need to learn to mend, make do, or do without and we and they will be better for it.


    Note to both: consider employing Ockham's razor with respect to causes of the Great Depression. Most miseducated, even indoctrinated, in public shool's and elite liberal arts colleges and universities, students today are often given a skewed account of the Great Depression of 1929-1941 that condemns free-market capitalism as the cause of, and promotes government intervention as the solution to, the economic hardships of the era.
    According to this simplistic perspective, an important pillar of capitalism, the stock market, crashed and dragged America into depression. President Herbert Hoover, an advocate of "hands-off," or laissez-faire, economic policy, refused to use the power of government and conditions worsened as a result. It was up to Hoover's successor, Franklin Delano Roosevelt, to ride in on the white horse of government intervention and steer the nation toward recovery. The apparent lesson to be drawn is that capitalism cannot be trusted; government needs to take an active role in the economy to save us from inevitable decline.


    But those who propagate this version of history might just as well top off their remarks by saying, "And Goldilocks found her way out of the forest, Dorothy made it from Oz back to Kansas, and Little Red Riding Hood won the New York State Lottery." The popular account of the Depression as outlined above belongs in a book of fairy tales and not in a serious discussion of economic history.


    I hope this clarifies your misperceptions about fiscal discipline and acts as a self-discovery catharsis about your potential biases about thrift and its inherent benefits for individuals and governments. Be honest or you don't stand a chance as things really get rough.
    30 Jan 2011, 08:48 PM Reply Like
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