...as usual:
We are not talking about the Great Depression, when output dropped by one-third and unemployment soared to 25 percent.
What we are talking about is a golden political opportunity for politicians to use the current financial crisis to fundamentally change an economy that has been successful for more than two centuries, so that politicians can henceforth micro-manage all sorts of businesses and play Robin Hood, taking from those who are not likely to vote for them and transferring part of their earnings to those who will vote for them.
For that, the politicians need lots of hype, and that is being generously supplied by the media.
Whatever the merits of trying to shore up some financial institutions, in order to prevent a major disruption of the credit flows that keep the whole economy going, what has in fact been done has been to create a huge pot of money-- hundreds of billions of dollars-- that politicians can use to give out goodies hither and yon, to whomever they please for whatever reason they please.
Four groups benefit from defining everything possible as disasters.
Consultants tried to convince you that this little Y2K bug meant the end of the world unless you hired them to add two more digits to date fields in your database. Now Al Gore pulls leaflets from his left pocket telling you the end is near unless you buy carbon credits, which he conveniently sells from his right pocket (HT W. C. Fields).
Troubled times mean lawsuits, so lawyers benefit from defining all times as troubled and making sure you know they are there to help (warning: link contains disgusting URL).
Media circulation/viewership increases with bad news. As housing prices once again become affordable, it's a crisis.
Politicians get elected by promising to solve problems, so the more problems you have the more they can promise. The sad part is that so many, from unemployed workers to automotive executives, expect politicos to fix the economy. But politicians don't actually make economic decisions, merely political decisions that have economic consequences.
Amid all the political and media hysteria, national output has declined by less than one-half of one percent. In fact, it may not have declined even that much-- or at all-- when the statistics are revised later, as they very often are.
We are not talking about the Great Depression, when output dropped by one-third and unemployment soared to 25 percent.
What we are talking about is a golden political opportunity for politicians to use the current financial crisis to fundamentally change an economy that has been successful for more than two centuries, so that politicians can henceforth micro-manage all sorts of businesses and play Robin Hood, taking from those who are not likely to vote for them and transferring part of their earnings to those who will vote for them.
For that, the politicians need lots of hype, and that is being generously supplied by the media.
Whatever the merits of trying to shore up some financial institutions, in order to prevent a major disruption of the credit flows that keep the whole economy going, what has in fact been done has been to create a huge pot of money-- hundreds of billions of dollars-- that politicians can use to give out goodies hither and yon, to whomever they please for whatever reason they please.
Consultants tried to convince you that this little Y2K bug meant the end of the world unless you hired them to add two more digits to date fields in your database. Now Al Gore pulls leaflets from his left pocket telling you the end is near unless you buy carbon credits, which he conveniently sells from his right pocket (HT W. C. Fields).
Troubled times mean lawsuits, so lawyers benefit from defining all times as troubled and making sure you know they are there to help (warning: link contains disgusting URL).
Media circulation/viewership increases with bad news. As housing prices once again become affordable, it's a crisis.
Politicians get elected by promising to solve problems, so the more problems you have the more they can promise. The sad part is that so many, from unemployed workers to automotive executives, expect politicos to fix the economy. But politicians don't actually make economic decisions, merely political decisions that have economic consequences.
