The Greedy Capitalist: David Veksler's Homepage :: Archives

It does not do you good to leave a dragon out of your calculations, if you live near him.-- J.R.R. Tolkien

August 29, 2003

Greenspan's "bubbles"

Economists at the BIS (The Bank for International Settlements is a central-bank for the world) have issued an inane ruling that shows just how clueless they are. They told a Fed conference that "Central banks should tackle emerging asset bubbles head-on rather than wait till they burst and then clean up afterward."
The only point in question with these statists seems to be how much state intervention is necessary to “soften the blow” of these mysterious and seemingly natural and unpreventable “bubbles.” Not much though is given anymore as to whether these bubbles actually exist, and what, if any, is their cause.

Any economist worth a damn would start by asking what traits of the market could cause such “bubbles” to occur. The answer is simple: none. The self-correcting nature of a free market prevents any such “bubbles” from occurring by setting interest rates that accurately reflect the public's ever-changing time preference for future growth versus current spending. It is only manipulation by the only entity that has the power of a gun – the government – that can create changes large and lasting enough to create the “artificial” changes that cause economic depressions. The government cannot even create the so-called “booms” in the economy – it can only create destabilizing shifts to or from investment and consumer spending that disrupt the normal flow of goods and investment capital. It can also destroy very real economic growth – such as that during the 1920’s and 1990’s -- by practicing monetary and regulatory interventionism. I don't want to launch into a polemic on economics, so if you want to learn more about actual economics rather than pure interventionist propaganda, I recommend Mises.org, or Capitalism.net

Posted by David at August 29, 2003 05:10 PM | TrackBack

Comments

Post a comment

Interact:

Forum
Chat Room
Listserv
Contact Me

Top Shelf:

Friends:
Absolute Reason
The Economistress
The Rational Egoist

Objectivist Bloggers:
Alexander Marriott's Wit and Wisdom
EGO
About the War
Fredrik Norman
wickens.ca
Nous Poetikos
Venting Steam
Chris Davis

Bloggin' Intellectuals:
The Agitator
VodkaPundit
The Patriette
Commiewatch
Free North Korea!
Little Green Footballs
Eye On The Left
Future of Russia
Free Will
Tim Blair
::Freespace::
InstaPundit
Hootinan

Organizations:
The Center for the Advancement of Capitalism
The Rule of Reason
ObjectivismOnline.net
Aggie Objectivism Club
Ayn Rand Institute
GMU Objectivist Club Blog
Utah Objectivist Club Blog
Geeks With Guns
Free Republic

E-Zines:
Capitalism Magazine
RightWingNews
The Intellectual Activist
The American Individualist
Drudge Report

Techies:
TechCentralStation
.Net Weblogs
Dive Into Mark
kottke.org
Scriptygoddess
Scripting News
C:/Pirillo
GeekPress
The War on SPAM
Textism

Humor:
Cox and Forkum
Baloo
Fillibuster Cartoons
DaveBarry
Dave's Columns
ScrapleFace
Allah is in Da House
Penny Arcade

Miscellaneous:
Quent Cordair: Artist's Studio & Gallery News
My Favorite Art
Everything in Moderation
Sekimori Live Blog

« LibertyLoggers »
Blogroll Me!

Calendar:

Archives: