The Wall Street Journal, 11 February 2009.

Joe Gwinn
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While appealing, history is not on your [or any one else's] side.

We have tried gold backed currency.

We have tried gold/silver backed currency. [bimetallism]

We have tried silver backed currency [silver certificates]

We are currently using fiat currency. [Federal Reserve note]

All of these have failed in one way or another, and inflation,
while slower with some and faster with others is still a
continuing problem, with periodic deflation sinking the entire
economy from time to time.

When you always do what you have always done, you will always get
what you always got. Insanity is repeating the same actions and
expecting a different outcome.

Somewhere there is a fundamental flaw in the economic model, and
more of the same only better, faster, cheaper, etc. is not the
cure.

IMNSHO, it is vital to implement a "zero based" [no prior
assumptions] critical/objective study of the US economy to try to
determine what went and what will go wrong, and then take
preventative measures to avoid yet another boom/bust cycle, as
these appear to be increasing in both amplitude and frequency.

Given the literally trillions of dollars being spent on rescue
efforts [c. 10 trillion in the US alone at last count], it would
appear to be common sense to spend a few hundred million to a few
billion to determine just WTF is going on here.

These periodic economic meltdowns, now global in nature, have
costs far beyond money as these frequently precede domestic
socio-political catastrophe [e.g. Weimar Germany/Tsarist Russia]
and major armed conflicts.


We already know the cause of these periodic meltdowns. It's called
Capitalism. What's the big mystery? Just look at history and you see the
same thing happens over and over to all capitalistic systems. They boom and
then bust over and over. Business competition ends in monopoly and the
wealth of a nation winds up in the hands of an elite few. There has been
something like 13 recessions since WWII. That's pretty regular if you ask
me. The only thing preventing them from being much worse than they have been
has been the intervention of government. Without it the booms and busts are
more often and more severe.

Capitalism is a system of winners and losers. Most are losers. When the
busts come you get more losers than in good times but that is how the system
works. Don't like what is happening now? Then you need to do a lot more than
just make a few changes at the margins. Free markets have once again done
what they have always done. The question is why people don't ever learn? If
you let the market decide everything for you then you have to accept the
damage that comes with a market based economic system. It seems that as bad
as it's getting that most Americans are still willing to accept the
downturns like this one. Maybe one of these days more people will see the
folly of the idea that the Bush administration provided us; "let the market
decide". Well, it did. How do you like it? Markets have no mercy.

Hawke