Comments on: No crisis of capitalism here, only a market correction http://www.crikey.com.au/2009/02/11/no-crisis-of-capitalism-here-only-a-market-correction/ now with extra source Sun, 12 Feb 2012 07:37:47 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: DAVID HARRIS http://www.crikey.com.au/2009/02/11/no-crisis-of-capitalism-here-only-a-market-correction/#comment-6249 DAVID HARRIS Thu, 01 Jan 1970 10:00:00 +0000 #comment-6249 Adam Schwab claims that our present economic problems are not a crisis of capitalism but just the market doing its job and correcting. 'Corrections may very well turn into crises for the foolish and greedy, .........but not for those who behaved responsibly, who didn’t borrow too much and who lived within their means.' Yet later in his article he recognises that this will have harsh effects on autoworkers for example.<br /><br />One of the characteristics of a modern economy is that the actions of the foolish and greedy do have implications for the 'responsible' and lots of other poor sods who have very little influence on those who exercise power in this or most other systems.<br /><br />While I'm on my soap box - from what I've learnt the global banking system could have imploded in the second half of last year if governments had not intervened. The approach of 'leaving it to the market' seems similar to telling the health industry to 'leave it to nature' if we face a pandemic.<br /><br />What does seem to be missing in the current conversation is a sensible debate about the type of policies governments can and should implement to get us out of this mess and help those who have been harmed. We might also try to discover why so few of those in positions of influence saw it coming and attempt to construct models that have better predictive ability. Personally, I am not a particular fan of Bill Bonner but we should see if he can contribute to our understanding.<br /><br /> Adam Schwab claims that our present economic problems are not a crisis of capitalism but just the market doing its job and correcting. ‘Corrections may very well turn into crises for the foolish and greedy, ………but not for those who behaved responsibly, who didn’t borrow too much and who lived within their means.’ Yet later in his article he recognises that this will have harsh effects on autoworkers for example.

One of the characteristics of a modern economy is that the actions of the foolish and greedy do have implications for the ‘responsible’ and lots of other poor sods who have very little influence on those who exercise power in this or most other systems.

While I’m on my soap box - from what I’ve learnt the global banking system could have imploded in the second half of last year if governments had not intervened. The approach of ‘leaving it to the market’ seems similar to telling the health industry to ‘leave it to nature’ if we face a pandemic.

What does seem to be missing in the current conversation is a sensible debate about the type of policies governments can and should implement to get us out of this mess and help those who have been harmed. We might also try to discover why so few of those in positions of influence saw it coming and attempt to construct models that have better predictive ability. Personally, I am not a particular fan of Bill Bonner but we should see if he can contribute to our understanding.

]]> By: Matt http://www.crikey.com.au/2009/02/11/no-crisis-of-capitalism-here-only-a-market-correction/#comment-6250 Matt Thu, 01 Jan 1970 10:00:00 +0000 #comment-6250 You hold up Bill Bonner, of The Daily Reckoning as some sort of guru who Canberra should listen to. Lets look at your statement closely - "It is no coincidence that Bonner also correctly predicted the current economic turmoil, telling subscribers at the beginning of the decade to liquidate their stock holdings and starting acquiring gold". The beginning of the DECADE (ie 2000). A loon running around in 2000 saying the sky is falling. Great prediction. Maybe if he had said it in 2008 you would have some credibility... You hold up Bill Bonner, of The Daily Reckoning as some sort of guru who Canberra should listen to. Lets look at your statement closely - “It is no coincidence that Bonner also correctly predicted the current economic turmoil, telling subscribers at the beginning of the decade to liquidate their stock holdings and starting acquiring gold”. The beginning of the DECADE (ie 2000). A loon running around in 2000 saying the sky is falling. Great prediction. Maybe if he had said it in 2008 you would have some credibility…

]]> By: Sean http://www.crikey.com.au/2009/02/11/no-crisis-of-capitalism-here-only-a-market-correction/#comment-6251 Sean Thu, 01 Jan 1970 10:00:00 +0000 #comment-6251 Politicians can't see further than the 3 years til the next election. Forget about using this crisis to implement meaningful change, hype the doom and gloom then preach about doing whatever it takes to save us all from the doom and gloom. "Kevin oh ten" is well underway already. Politicians can’t see further than the 3 years til the next election. Forget about using this crisis to implement meaningful change, hype the doom and gloom then preach about doing whatever it takes to save us all from the doom and gloom. “Kevin oh ten” is well underway already.

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