On Thu, 12 Feb 2009 20:11:23 -0800, "Hawke"
wrote:



The Wall Street Journal, 11 February 2009.

Joe Gwinn
----------------
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

-------------
Sounds good, even plausible, but until the data is compiled and
examined we don't know. For all we *KNOW* sunspots may be the
problem.

For the first time with the computerization of most significant
transactions, instant communications via the net/web, and the
development of super computers, we have the opportunity to not
just theorize but investigate in detail. Indeed, the various
bailout schemes provide the perfect opportunity to "inject" money
into a sector and then track what happens, sort of a gigantic
"design of experiments" project for the whole societ/economy.

One major problem in the US is that much of what is public
economic data/statistics in other countries such as Canada, NZ,
Australia, etc. is now privatized, and not available unless you
are willing to spend thousands of dollars. We [the US] appear to
still accumulate and reduce much of the data through government
agencies such as the BLS and BEA, but this is "sold" to private
firms for distribution at a profit.

If you follow the NG discussions, you know that I am attempting
to determine what process/criteria was used by the mandarins to
decide what economic sectors get the money injections.

I am having little success as current economic data is not
available or is available only in highly aggregated format.

Indications now are that the output multiplier data by SIC/NASIC
for commodity output, wage out put and employment output [number
of people hired], plus possibly some others was indeed used, but
that some sort of weighting was used for the data items to
produce an aggregate "score" so the rank order on this "score" of
the SIC/NASIC industries was what the three pigtail mandarins
thought it should be, e.g. none of that nasty old manufacturing
(that we just got rid of), but plenty of information technology,
financial services, education, and medical jobs requiring college
credentials.

Bloomberg already filed FOIA requests for this and several other
"rescue/rejuvination" related items and was told in effect "blow
it out your ear."

Even if the Adam Smith model is no longer functional [it had a
good run, 200 years ain't bad] in the "brave new world order,"
until and unless we do the research, we won't know what to
replace it with, and all we can do is shuffle the deck and hope
for better luck on the draw next time. I know as a country and
species we can [and should] do better than this....


Unka' George [George McDuffee]
-------------------------------------------
He that will not apply new remedies,
must expect new evils:
for Time is the greatest innovator: and
if Time, of course, alter things to the worse,
and wisdom and counsel shall not alter them to the better,
what shall be the end?

Francis Bacon (1561-1626), English philosopher, essayist, statesman.
Essays, "Of Innovations" (1597-1625).