It's a good question. Most of the commentators I've read (even the ones who predicted the credit difficulties) seem to have boundless confidence that the government's actions will alleviate the credit crisis. I'm not so sure. There is a school of economics (Austrian school) that says that ANYTHING the government does to lessen the affects of a credit crisis will make it worse. I'm inclined to agree with them. Here is one guy who is applying Austrian economic theory to the current situation:
Clearly, in response to the current financial crisis the US government -- and most other governments, for that matter -- is doing exactly what Mises and other great economists of the "Austrian School" claim should NOT be done. Specifically, the US government is trying to prop up unsound business situations; it is bailing out and lending money to business firms in trouble; it is attempting to prop up prices; it is trying to inflate again in order to boost the economy; and it is rapidly increasing its own expenditures.
Bet you won't here THAT on CNBC!
2 comments:
You know what dad I think you are taking a pessimistic view on this. You need to be more of an optimist like me. If McCain gets elected he is going to attack the whole world so we will conquer everyone and not have to worry about money. And if Obama is elected we are going to love each other and everyone will give us money just because we all love each other. And extreme islamists will have bombs full of candy for the little children.
I know...I need to be more of an optimist...like you! Hahahahah!
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