From Llewellyn Rockwell in this piece: “If the money is used to prop up failing companies, that’s particularly bad since it is an attempt to override market realities, an attempt that is about as successful as trying to repeal gravity by throwing things up in the air.”
Source link: http://blog.mises.org/9018/best-explanation-in-one-sentence/
Best Explanation in One Sentence
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I read it on mises.org in a daily article, forgot who said it:
“It’s like curing a herion addict with heroin”
“History has not dealt kindly with the aftermath of protracted periods of low risk premiums.”
or,
“The Fact that our economical models at The Fed, the best in the world, have been wrong for fourteen straight quarters, does not mean they will not be right in the fifteenth quarterâ€
Alan Greenspan
I saw PIMCO’s Paul McCulley on CNBC this morning wearing out the catch-phrase “ongoing concern,” in an effort to color the bailout of existing losers in a positive light as compared to bankruptcies and “fire-sales” to more competent owners. “We must maintain these banks as an ongoing concern.” I’ll bet he repeated it half a dozen times or more.
Too bad they didn’t have Jim Rogers on, who always notes the bailout is a choice between the competent vs. the incompetent. With the government falling on the side of the incompetents.
This may or may not be the clip. (I can’t watch at work to verify)
http://www.cnbc.com/id/15840232?video=938759900&play=1
I think Mises.org would do well in getting inspiration from The Economist (well known newspaper) regarding applied Keynesinism, and how to NOT tackle economic reality / crisis / situations.
Geir, while subscribe to The Economist (a magazine, not a newspaper…) and enjoy many of the articles, this doesn’t mean its word is as good as gold. Popular media seems to think that Keynesian economics saved the United States from the Great Depression and will therefore save us, but as you may find as you read more on this website and in the books recommended here, this conclusion is dubious when viewed through an Austrian lens. The massive spending going on that will continue to increase over the next year will likely stall our economy even more, propping up organizations and systems that do little to produce real, tangible value. I encourage you to read Mises’ The Causes of the Economic Crisis.
It is like trying to make unethical practices ethical by lying and stealing and killing!
Anyone with common sense would agree that unless a problem is addressed at root, it would resurface later and relapse could be more severe. I have tried to present a root cause analysis of the financial crisis and practical solutions for short term as well as long term in the article on link below. The title of the article is “Henry Paulson’s Approach is Bass Ackwards”:
http://commonsensetopics.blogspot.com/2008/11/henry-paulsons-approach-is-bass.html
Excellent speech by Ron Paul at the End the Fed rally in Houston on Saturday:
http://www.ronpaul.com/2008-11-23/ron-paul-end-the-fed/
And, videos on the rallies across the country:
http://www.seektress.com/fedrally.htm
How’s this for an anti-bailout ‘one liner’.. “Moral Hazard costs more in the long run than systemic risk.”
Its like jumping off higher and higher cliffs in hopes that eventually you will find one high enough to not hit bottom.
David,
I love your analogy!
Here’s a good one.
“History proves that a smart central bank can protect the economy and the financial sector from the nastier side effects of a stock market collapse.”
Ben Bernanke
Tuna Melt
I guess what Bernanke is really saying is that there has never been an example of a smart central bank anywhere in history…
Mike > “It’s like curing a herion addict with heroin”
The western medical treatment for optiate addiction is switching to a different opiate such as methadone. Often, the treatment lasts for the life of the patient.
Never argue with a fool. People might not know the difference.
One problem I do have though is truly much more to do with how you go about building a blog which cultivates people actually leaving comments and moving forward from passive readers to proactive contributors. Any ideas? I recently wrote something similar for the mean-spirited blogger or even commenter. I really don’t encourage malicious comments in my blog. I usually assume my visitors are intelligent and the mean-spirited don’t belong to my blog.
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