Thursday, December 11, 2008
Yaron Brook on Newsweek.com
Yaron Brook was interviewed for this article on the economic crisis on Newsweek.com. There is a nice interchange of question and answer, and some substantive issues are covered. Nice job, Dr. Brook and Barrett Sheridan of Newsweek! It's always nice to read a truly alternative viewpoint on important issues.
Tuesday, December 2, 2008
CO Skiers Rejoice
My camera was fogged up, but you get the picture here: lots of fluffy snow to play in. This made for a fun Saturday, since over the weekend, the Continental Divide west of Denver got over 4 feet of snow in 3 days, making local skiers -- and lucky visitors -- very happy.
There's a lesson here. I don't like the cold and didn't particularly enjoy snow until I chose to like it. What I mean is, while living in upstate New York, I decided to take advantage of the winters rather than fight them, and so I learned to ski. When you commute home on a highway in 6"-12" of snow at rush hour, you'd better adapt! After that, snow storms became something to look forward to. Why fight something that's inevitable?
There's a lesson here. I don't like the cold and didn't particularly enjoy snow until I chose to like it. What I mean is, while living in upstate New York, I decided to take advantage of the winters rather than fight them, and so I learned to ski. When you commute home on a highway in 6"-12" of snow at rush hour, you'd better adapt! After that, snow storms became something to look forward to. Why fight something that's inevitable?
Monday, December 1, 2008
The Economy: Duh or D'oh!
(Please pardon the broken link on the OBloggers feed, I seem to have an itchy "Publish Post" finger tonight and temporarily published 2 versions of this post, then deleted them, but one had already been picked up by the feed and is now a broken link)
Anyway...
Either exclamation will suffice for the NBER's announcement that we are in a recession. No kidding.
I have to admit I'm a bit surprised that the stock market is as low as it is right now. If you think of the credit bubble as an over-valuation of assets, the level that markets will should come down to is going to be some sort reckoning of the "actual" value of the economy once the inflated value is removed. Since markets have lost about 40% of their value since the DOW was around 14,000, that would mean that investors' reckoning of the "true" value of the economy is only 60% of what we once thought it was. I find that shocking.
It is also possible that the value was much greater even within the last few months, but that government fumbling and uncertainty has allowed further losses to occur since then. In other words, while everyone was waiting for the government to save them, failed businesses could have been liquidated and valuable assets acquired. Instead, money continued to be lost by those businesses, so their value is already less than it once was when the government started talking about "saving" them.
And once again, this begs the question of why anyone would consider this to be news, when failure is precisely what our government is aiming at?
When you bail out failed businesses, you are paying businesses to fail. When you talk about "helping" the auto industry, you are talking about paying businesses to fail. The government cannot "help" by providing loans, because the government does not own any money. It only has the power to divert funds from chosen uses to unchosen uses (via taxation or monetary policy). When it comes to spending money, the government can only prevent what investors want to do with said money. It should do the right thing and proclaim loudly and clearly its intent to stand on the sidelines and let nature take its course.
However, since the very reason for being of government agencies is to meddle, this is unlikely. And so is economic healing.
Anyway...
Either exclamation will suffice for the NBER's announcement that we are in a recession. No kidding.
I have to admit I'm a bit surprised that the stock market is as low as it is right now. If you think of the credit bubble as an over-valuation of assets, the level that markets will should come down to is going to be some sort reckoning of the "actual" value of the economy once the inflated value is removed. Since markets have lost about 40% of their value since the DOW was around 14,000, that would mean that investors' reckoning of the "true" value of the economy is only 60% of what we once thought it was. I find that shocking.
It is also possible that the value was much greater even within the last few months, but that government fumbling and uncertainty has allowed further losses to occur since then. In other words, while everyone was waiting for the government to save them, failed businesses could have been liquidated and valuable assets acquired. Instead, money continued to be lost by those businesses, so their value is already less than it once was when the government started talking about "saving" them.
And once again, this begs the question of why anyone would consider this to be news, when failure is precisely what our government is aiming at?
When you bail out failed businesses, you are paying businesses to fail. When you talk about "helping" the auto industry, you are talking about paying businesses to fail. The government cannot "help" by providing loans, because the government does not own any money. It only has the power to divert funds from chosen uses to unchosen uses (via taxation or monetary policy). When it comes to spending money, the government can only prevent what investors want to do with said money. It should do the right thing and proclaim loudly and clearly its intent to stand on the sidelines and let nature take its course.
However, since the very reason for being of government agencies is to meddle, this is unlikely. And so is economic healing.
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