This page has been archived and commenting is disabled.
Guest Post: The Pretence Of Knowledge
Submitted by Monty Pelerin from economicnoise.com and originally posted at 20smoney.com
The Pretence of Knowledge
Friedrich Hayek
The "Pretence of Knowledge" was the title of economist Friedrich Hayek's 1974 Nobel speech. In his first few sentences, he described the then-prevailing economic condition in words appropriate to today:
“[this economic condition] has been brought about by policies which the majority of economists recommended and even urged governments to pursue. We have indeed at the moment little cause for pride: as a profession we have made a mess of things.”
Hayek's words in 1974 were not meant to describe today's condition, although they were extremely prescient. His hope was that the limits of knowledge would be recognized by the economics profession so that we would never reach our current situation.
Hayek's call was for professional humility at a time when Keynesians arrogantly believed they could manage the economy and the business cycle. His was a caution about how little we really know about the economy and can ever know about it:
“...in the study of such complex phenomena as the market, which depend on the actions of many individuals, all the circumstances which will determine the outcome of a process, ... will hardly ever be fully known or measurable.”
Hayek described the role of economics as follows:
The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.
Two decades earlier Hayek had dedicated his The Road to Serfdom to the socialists of all parties in hopes that they would see the error of their ways. This warning was ignored by the political class as his Nobel speech was subsequently ignored by most economists.
Fast Forward To Today
Last week the Chairman of the Federal Reserve, Ben Bernanke, testified before Congress. He described the condition of the economy as "unusually uncertain." That phrase, fogged up enough to make Alan Greenspan proud, was inconsistent with Mr. Bernanke's prior "pretence of knowledge." Peeling back the Fedspeak, Mr. Bernanke essentially admitted that he was baffled by the economy and had no idea what might happen next.
For anyone who has looked at Mr. Bernanke's (the Fed's) forecasting record, this quasi-admission should not surprise. Mr. Bernanke has not foreseen anything with reasonable accuracy. As Mish pointed out:
“Ben Bernanke was pretty certain there would not be a recession, that housing was not in a bubble, that the unemployment rate would peak at 8.5%, that paying interest on reserves would enable the Fed to hold short-term rates above 2%.”
Bernanke was wrong on every count. At least now he admits he is guessing.
Most economists have ignored Hayek's caution for humility. Bernanke's doubts in his recent testimony are both new and troublesome. It suggests that he does not know what to do next. He has tried everything that he “knows” in dosages never before imagined. Despite his actions, monetary and fiscal actions have not moved the economy. This is not the way the world is supposed to work, at least according to the (increasingly disrespected) prevailing macro-economics.
Mr. Bernanke and others of his generation and training have absorbed what Mark Twain described as dangerous knowledge:
“It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so.”
In modern days, Twain’s aphorism was formalized by Thomas Kuhn. Kuhn wrote The Structure of Scientific Revolution which dealt with the difficulty of changing scientific paradigms.We are at the point where increasing numbers of people question the value of the existing economic paradigm. Bernanke’s testimony may be the start of his Thomas Kuhn moment.
A long battle between the defenders of the old paradigm and the rise of a new one is about to take place. Bernanke, most professional economists and politicians will do everything they can to protect the status quo. Crises often shorten the period of acceptance for something new. That was the case in the 1930s when we accepted the false paradigm of Keynesianism. Desperation caused hundreds of years of economics to be thrown overboard for an unproven theory.
Two years into the crisis with unemployment still rising (using the broader measures) and stimulus almost exhausted, the economy is dead man walking. Negative GDP numbers are likely to appear once the stimulus ends. While government may have some bullets left, they fired their missiles and howitzer shells and are left with small arms. Somewhere Mr. Hayek must be smiling and thinking: "I told you so more than fifty years ago."
The incorrect paradigm that has guided government policies for about 70 years is spent. Economies around the world have been crippled as a result of its incorrect prescriptions -- increased taxation, spending, debt and regulation. Even the highly socialistic Western Europe economies appear to be recognizing the error in such stimulus policies. In the Financial Times Jean Claude Trichet, Bernanke’s counterpart, has recently been highly critical of U.S. economic policy.
To be fair to Mr. Bernanke, it is not his fault. As Hayek explained, no one is capable of doing what cannot be done. Mr. Bernanke's sin was to pretend otherwise, not his failure to do the impossible. Of course, to not pretend would have made Mr. Bernanke ineligible for government employment. Whether he truly believed he was capable of managing the economy or he just tried to maintain the crucial statist political myth is not knowable. My guess is that Bernanke was motivated primarily by his sincerity to the false Keynesian paradigm but was also recognized the necessity of maintaining the myth.
Critics will judge Mr. Bernanke harshly. They will argue that prior Fed chairmen did better jobs. That conclusion is false, although arguing it is as subjective as judging a beauty contest and as useful as last week’s newspaper. The reality is that other Fed chairman had options not afforded Mr. Bernanke. Because they preceded him, they worked with an economy less damaged than Bernanke inherited. It was their decades of false paradigm prescriptions that so damaged the current economy.
A free-market economy is a self-correcting mechanism despite all the protestations of Keynes, his followers, government economists and politicians. Benign neglect is all that is required to enable an economic recovery when an economy is free and flexible. Prior Fed chairman did not practice benign neglect. Like the physicians of yore, economists believed their form of bloodletting cured the economy. This myth was especially convenient for politicians who could claim credit while buying votes at the same time.
Cumulative abuses heaped on the economy weakened its resilience. We are at the point where the patient is so weak that additional bloodletting is likely to cause death. It was Mr. Bernanke's misfortune to rise to the job at the wrong time. While this may buttress the case that he was no worse than his predecessors, it certainly doesn't excuse his judgment.
For any thinking economist, not blinded by the false Keynesian paradigm, it was obvious where this economy was going at least ten years ago. Bernanke’s decision to accept the job when he did was equivalent to knowing history and accepting the captaincy on the maiden voyage of the Titanic. Should we be surprised that Bernanke is unable to forecast with any accuracy? Or are we to presume that his ego was so big that he believed he could navigate the ship through the icebergs?
Hayek’s final book, written in 1991, had the title of The Fatal Conceit. Although not directed specifically at economists, the phrase is an accurate description for much of the economics profession for the past 70 years.
Our economy is broken and on the verge of collapse. Send thanks to most any economist that has served in government over this period or taught at an Ivy League school.
Written by Monty Pelerin - read more of his writing at www.economicnoise.com
»
- 7527 reads
- Printer-friendly version
- Send to friend
- advertisements -
I suspect we will see the opposite being written about Economy as a science in 50 years. At least I hope we will. For the sake of all of those that will come after us.
Won't the history be written by whoever wins whatever is being fought?
Indeed. To the victor goes the spoils.
Will good triumph over evil? How will we know what IS good?
I think you will find some solace in the writings of Aristotle.
Bugs Bunny had a couple of things to mention there as reminders though regarding carrots and cross dressing as well.
Why not use a citation? I hate it when people toss a name out without reference unless they are following on their own stream of thought (rant).
Who needs a citation for Aristotle? It's not as if it's hard to find.
I suggest you start with his Politics.
Good is what ever the victor say it is. Until the next victor comes along.
Cue up B9K9's Law:
"As an online discussion grows longer, the probability of a suggestion involving lack of awareness or knowledge by the power-elite approaches 1."
It is the utter height of hubris to believe that reasonably intelligent people, such as those who frequent ZH, possess some unique insight into our current state of affairs, while those who scored perfect 1600s on their SATs are somehow "confused" that their predictive models aren't operating correctly.
Sheeit. Look guys, life is simply a struggle for survival. There are numerous strategies employed to gain competitive advantages in the fight over scarce resources (pussy being a primary driver). Chief amongst these tools is deception.
While you may wish to believe that these economists are going home each night "puzzled", rest assured they are busily converting their high-income salaries, perks & benefits into real assets to weather the coming storm.
It is the utter height of hubris to believe...
There is only way to finish that sentence.
...that we understand God's thoughts, desires and intentions, such as organized religion professes.
I don't want to divert this into a religious discussion, but the apex of arrogance knows no match to organized religion.
The Lady Poverty
.
and making sure they are indispensible so they have a seat in the bunker.
Cheeky, while I have the same hope & expectation you do, I don't understand the quote.
Non-Euclidean geometry was created in the 19thC as a mathematical toy. Only Einstein in 1912-1915 started to apply it to the real world.
Where is the quote from? Googling Ryolov 2005 gets me nothing useful...
Its a bit older than that; but without going into a debate here; the quote is from this paper. And I idiotically mis-spelled the authors name. Its Rylov.
http://arxiv.org/PS_cache/math/pdf/0503/0503261v1.pdf
Page 1; Abstract and later the variations of the statement can be found throughout the paper.
Professor Steve Keen gets it. That's the way forward for economics. His models are superb and so are his elaborations on Minsky's model. Collapse is coming.
Keen is a dope - and I mean that in the most sincere terms. His colleagues must look at him as some sort of Don Quixote. It's like: "Man, get a clue. This fucker is going down & fast, so try & scam as many BennyBux as possible to acquire real assets before the mother blows". LOL
Mmm...red meat.
You know, there is an underlying assumption that this whole mess was not done on purpose...
Absolutely. This government is famous for breaking your leg and then handing you a crutch saying "see without me, you couldn't walk."
Excellent analogy.
MC,
that's great. don't mind if i borrow it.
Well, there is an underlying assumption that the government and power elite want us to believe that it was not done on purpose. And yet, it was reported that at the 2008 (spring) Bilderberg meeting which both Obama and Hillary attended that they would bring down asset values to the 1998 level. Of course you will only find that documentation at supposedly "dubious" sources, pooh poohed by MSM.
It has also been shown that the Fed has the ability to control boom and bust through the amount of money they put into the economy and that paying interest on reserves and giving banks a way to make money by making a risk free 3% transaction (borrowing from the Fed and lending to the Treasury) decreases the money for other more productive purposes. Fed policy is keeping banks from looking for other entities to lend to. Giving the government all of the capital, at interest, makes the government boom (and at the same time become more dependent on the banks) and nothing else.
One would hope that there are powers out there capable of providing a balance with the malignant central banking empire.... or at least an opportunity for a restart.
There is?
Great essay by Hayek... it was really him mocking the idea that economics is similar to the other physical sciences. Not that the nobel committee figured it out. His essay is hard reading/difficult to understand. I'm sure their eyes glossed over right about when he said:
"It seems to me that this failure of the economists to guide policy more successfully is closely connected with their propensity to imitate as closely as possible the procedures of the brilliantly successful physical sciences - an attempt which in our field may lead to outright error"
Reminds me of that one Pandora's Box episode.
http://video.google.com/videoplay?docid=8639026381197734332#docid=-32729...
goto 4:48 in the video for a full monty display of one such error.
If anyone is interested, the whole series is on google video. Great stuff.
The episode on Soviet central economic planning has to be seen to be believed.
The study of history is a powerful antidote to contemporary arrogance. It is humbling to discover how many of our glib assumptions, which seem to us novel and plausible, have been tested before, not once but many times and in innumerable guises; and discovered to be, at great human cost, wholly false. --Paul Johnson
Thanks for the link. The fact that they used a water toy to predict economic growth is frightening.
Ain't it though?
Although, I'm sure the Fed's "Economic Modeling" computer programs are all based on the same false principles.
Heh. I didn't see any allowance or provision for "leaks", extraneous evaporation, polluted "water", or overflow of compartments.
I guess any decent plumber could run a country!
Obvously an Austrian house painter can screw one up just as well.
Thx for the link Rusty! The Paul Johnson quote is one of my favorites, which can be segued into Einstein's definition of insanity.
Excellent link. Very informative history that crystallizes the TPTB's incipient invoking of Friedman/Keynes as the economic good cop/bad cop in that particular Hegellian dialectic dramaturge of GB ca. 1976.
Interesting time in history also for the emergence of China as the shining beacon of slave-wage industrial output for the globalist neo-fuedal social engineers...as Pax Britannica wanes so China rises...to only later consume and de-industrialize an unsuspecting America and the NAFTA continent as quid pro quo for China's one-child policy.
One cannot truly optimize control of the 'divide and conquer' tactic until all the requisite participating components are distilled into their purest and most malleable alloys.
De-industrialize here, wage-war there, re-industrialze as a neo-colony here...the world is not a stage...it's a laboratory to the Borg hive
If only I'd realized that it's "pretense" with an "s"! Maybe some brit gave me the other spelling.
Well said. A fine commentary, indeed.
The Nobel award to Dr. Hayek was, just arguably, the last time those silly bastards got it right. Witness their subsequent awards for the past 25 years, Mundell, Stiglitz, Krugman (sticking 3 fingers down my throat) among other thoroughly incompetent clowns...speaking of the real world, of course.
In 1946, if I recall correctly, the alcoholic but occasionally amusing self-styled pundit, Dorothy Parker, offered the following thought:
"If all the girls at the Yale prom were laid end-to-end...I shouldn't be at all surprised."
Miss Parker, again if I am not mistaken, was also the author of the aphorism: "You can lead a whore to culture, but you can't make her think."
These days, perhaps these two comments should be altered somewhat and combined, at least as regards economists:
"If all the economists in the world were laid end-to-end, there would just be a couple of dozen thoroughly bored hookers."
As Dr. Einstein famously noted, insanity consists of doing the same thing over and over, and expecting a different result over time.
Would anyone here on ZH disagree that the "economists" have been doing JUST that for 30-odd years, and are therefore, most of them, quite insane?
Which leads to the next question. If goobermint listens to these "economists", and has done for years, what does that make goobermint, eh?
Trading tip of the day: ONLY short strangles when you've reason to be confident that the IV of the options involved will decline more or less immediately, in the best case, starting tomorrow morning.
Best wishes,
SAJ
RE: Gummint.
"Who is the greater fool? The fool, or the fool that follows him?" - Obi Wan
Remember: our economists that love Keyes, socialism or communism all believe that the previous practicioners were not the right people but they are the right ones to accomplish the impossible. If not, Just ask them.
I do not believe Bernanke was saying what he really new.
What else was he supposed to say about the economy? He new it was headed for the shit house.
"Free" economy ,thats the word that dosen,t exist in the current financial system.Manipulation of "Free" has brought the current situation about.
Bernanke had a choice: to be reappointed or to excuse himself and get out. He chose to stay because he thinks he can do it.
The problems in front of him are as difficult, not more, as the predecessors had when they didn't know what was ahead. So, congratulations for Bernanke for the courage to stay but no upfront excuses for his oncoming failure.
This is a beautiful epitaph for a dead philosophy.
and two more junkers who actually hold out hope, no matter what the math and reason say.
I think my junkers are in a bad romance with me, so to speak.
It is very difficult to grasp all of reality for to do that means you appreciate fully opposing viewpoints to your own, every color of human experience, and all parts of the equation of existence.
There would be nothing to entertain you.
Therefore you would not be incarnated here.
Thus, the absolute sanctity of others to act as they are and not be controlled is the most vibrant society. Any enforcement of ONE moral code and system leads to stultification and ultimate system revolt and destruction.
This is a neverending cycle.
That is the math.
"Any enforcement of ONE moral code and system leads to stultification and ultimate system revolt and destruction."
While I share your hate of Keynes and what his disciples have done world wide, can we explore the "ONE moral code and system leads to stultification" position?
I would venture to say without a "shared" and enforced moral code in society, it could not even be formed.
That is, if one faction within our hypothetical society felt rape was not immoral and another faction felt murder was not immoral and still another faction felt robbery was not immoral where would that lack of a moral code lead?
Obviously, I think, they would not get past one faction raping of the robbers wives and the murderers killing both factions before turning on themselves.
While it is within most people to want to take a "walk on the wild side", something immoral or unlawful, they do not wish to live there forever, because they inherently know it is self destructive.
Not flaming...just convo.
You wrote: "Thus, the absolute sanctity of others to act as they are and not be controlled is the most vibrant society. Any enforcement of ONE moral code and system leads to stultification and ultimate system revolt and destruction."
Respectfully, this belief lies at the heart of all that is destructive in the world. Relativism. It's both inane and almost an universal acid, that eats through any sense of good, bad, evil, or even what I might call blue or what you say is green.
There is a chasm of difference between elevation of a particular ideology as the "One" (or person for that matter) and a society founded on a Unity of beliefs.
I am, you are. We must eat, drink, and breathe in order to exist. This is the only reality. All else is redundant.
An orange tree is of absolutely no use to us until we consider how best to pick its fruit to sustain our bodies, which sustains our minds, while being mindul of future harvests.
Even the corner used car salesman knows you don't lend nobody nuthin' if they don't have big skin in the game. Very, very, very few are members of the Harvard-Yale-Princeton club.
Anyone who takes Hayek seriously is a complete idiot who knows nothing about economics. Read Sraffa on Hayek--and Sraffa was a constructivist (a la Georg Cantor, who famously said of one of his "equations," 'I see it, but I don't believe it')! Oh I forgot. You know nothing about economics. As Stalin liked to say, Ha ha ha!
Good point. <eyeroll>
Have you been playing with the square roots of negative numbers again?
Wikipedia says that Keynes like Sraffa's work so much that he secured a lectureship for him at Cambridge. And we see how Keynesianism is working out.
Hayek was brilliant. The last chapters of his book Human Action, which was published in 1949, is the perfect play-by-play reporting and analysis of every failed effort and policy by the government and banks. I was amazed, it could have been written this year. As for Bernanke's "unusually uncertain" - that's pure BS - we know with far too much certainty that the government has messed up really bad and things are not getting better. In a free market, uncertainty is the norm.
"Hayek was brilliant. The last chapters of his book Human Action"
Um, that book was written not by Hayek but by his teacher, Ludwig von Mises.
"I was amazed, it could have been written this year."
Yeah, the assumptions used in that book - such as the existence of human beings and their ability to perform voluntary exchanges - aren't going out of style any time soon.
Even if you are dealing with a person surviving alone on a island, where only autarkic exchange exists, parts of the book are still applicable.
Dang, confusing my Austrians! Hayek's Road to Serfdom was a powerfully written and deeply disturbing.
If you're going to build a defensible theory of exchange you have to begin at the beginning, where survival is a matter of utilizing your own resources. Mises' observations on capital formation in advanced economies and the consequences of capital consumption are very appropriate today. Perhaps more important though, his observations on the consequences of government interventionism.
There will be a time in the not so distant future when Keynesian economics will be passe but unfortunately it's economic destruction will last for decades.
I take comfort knowing the current pillars of power in the US will be removed by an angry populace. Best remembered in coming decades as topics of jokes or used mockingly in expressions such as he is as stupid as the defunct Federal Reserve, spends money like a drunken politician from 2010 and as financially bankrupt as a Wall Street Banker.
Human Action is a great book. But it was written by von Mises, not Hayek
Yeah, Luddy did that one, not me.
If you want to read a great book refuting every premise of Keynsianism, then pick up "The Failure of the New Economics" by Henry Hazlitt...an absolute must read.
"The Keynsian Episode" William H. Hutt as well.
jeff has been on a tear. i strongly recommend this article and the link to the' banker's manifesto.' great read.
http://www.bullionbullscanada.com/index.php?option=com_content&view=article&id=13934:us-home-equity-loans-revealing&catid=47:us-commentary&Itemid=132
Mark Twain: “It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so.”
I love Taleb on this kind of thing - scepticism about the quality of one's knowledge, the limits and dangers of forecasting, the innate human tendency to assemble narratives etc. (not to be confused however with that postmodern (or whatever) black-is-white-white-is-black kind of crap)
"...while most human thought (particularly since the enlightenment) has focused us on how to turn knowledge into decisions, I focus on how to turn lack of information, lack of understanding, and lack of “knowledge” into decisions..."
He's also made a great effort to corral the (mostly obscure) scholarship of those who have studied this kind of thing off and on over the millenia. Paradoxically, like a benign looking but deadly poisonous sea creature it seems that the wishy-washy "dismal science" of economics is almost uniquely capable of packaging up these weaknesses of human thought and leveraging them over whole populations to disasterous effect.
Hayek says essentially the same thing in his lecture. Read it carefully.
Unlike the position that exists in the physical sciences, in economics and other disciplines that deal with essentially complex phenomena, the aspects of the events to be accounted for about which we can get quantitative data are necessarily limited and may not include the important ones.
Keynsianism was not new when Keynes stated it. The theory was the realm of crackpots=that printing money created wealth. Keynes just created a bunch of screwy graphs and equations. Keynes wasn't new and untried, but old nonsensical rubbish.
Indeed. Keynes was in essences, curve fitting
Apparently Keynes lost a lot of money investing. His family bailed him out. I wonder where his ideas on economics came from?
Meanwhile, Tina explaines downhome livin'
http://www.youtube.com/watch?v=ipOz_k9zvzo
To be fair, he lost a lot then made it back and much more after friends bailed him out.
Great loads of knowledge. Vast steaming piles of it!
I know Keynes is not popular here, but I would hope that everyone here knows that Bernanke is pursuing a pure monetarist response as outlined by his mentor Milton Friedman in his essay on what caused the Great Depression. Bernanke is not a keynesian, he is a monetarist. And another thing, why doesn't any one here discuss Minksy, a keynesian (of which the current post-keynesian school of thought like Steve Keen) but not the same as the traditional keynesians like Krugman. I believe Minsky has more to say and offer regarding our economic crisis, a good deal more than the Austrians like Hayek who could not complain about the unregulated run up/superleveraging that market forces did by themselves.
I don't believe you understand Austrian Philosophy. At the core is money... how it is created, who gets to create it, what it is. You absolutely can't pin the absurdity of the last 50 or 60 years on anything even remotely resembling Austrian economics.
"that market forces did by themselves."
Is not banking regulated by the state? What part of any business is not regulated by the state?
What market forces are you talking about that escaped the all encompassing grasp of the state?
.
I thought Krugman the Lost was a Neo-Keynsian.
Anyway, the unregulated run up/ superleveraging was fraud, not market activity. Even Austrians allow that government should prosecute fraud. Instead, the pseudo-keynsian government promotes and protects fraud, as long as it is not laizz'ez faire fraud, like Madoff.
His crime? He didn't share.
"Even Austrians allow that government should prosecute fraud."
Yes, a lot of Austrian economists advocate outlawing fractional reserve banking as it is essentially criminal fraud. From a utilitarian point of view, they also consider it harmful to the economy as it causes wild changes in the money supply.
Note that these pronouncements depend on some (reasonable) ethical choices, and cannot be derived strictly from economic science, which is itself value-free.
"I believe Minsky has more to say and offer regarding our economic crisis, a good deal more than the Austrians"
Austrian economics is trustworthy because it is based on a few reasonable assumptions and logical arguments that have stood for decades.
Now, perhaps Minsky can say more, but how do you know whether what he says is true or false?
How do you know that Austrian Economics is trustworthy or that its assumptions are reasonable when we've never lived in a society that followed its prescriptions?
All we know is that neoclassical economics (keynesianism, monetarism) is bankrupt because it always assumes that the economic system is in equilibrium.
Minsky not only assumes desequilibrium but explains how ponzi dynamics drives the financial system towards instability.
Many predictions from Minsky's model came to be true, for instance that desquilibrium would follow a period of "great moderation".
I highly recommend you read Steve Keen's paper which can be found here:
http://www.debtdeflation.com/blogs/wp-content/uploads/papers/KeenAreWeItYetPaperFinal.pdf
"we've never lived in a society that followed its [Austrian Economics'] prescriptions"
You misunderstand AE. It prescribes nothing. AE does give you tools to see what consequences a given policy will have. But it cannot tell you what policies there should be any more than physics can tell you what a road's speed limit should be.
AE cannot cross the is-ought boundary unless you add in your own ethics. For example, if your goal is to make poor lose their jobs, AE will help give you information about how to do it. And if your goal is to help poor people gain jobs, AE will also say something.
An Austrian economists advocating something; say, gold over paper money; has left the realm of strict science and is simply using their subjective ethics to pick out the policy they see as working "best".
AE is a science dealing with human action - that of imperfect people in the real world. It does not depend on some fantasy land to work.
"Many predictions from Minsky's model came to be true, for instance that desquilibrium would follow a period of "great moderation"."
Perhaps "many" of his predictions were seen to be true for a given historical period - i.e. a particular set of people and market conditions. But are they lucky guesses, or timeless laws of apodictic certainty?
Did some of his predictions prove to be false?
I think you're really onto something here.
Friedman deserves a lot of scorn. Rothbard gave him hell in his books, lectures, and articles - and rightly so.
Keynes had a lot of good things to say, as did Marx.
Unfortunately, the -isms coming from them pick and chose from the sources in order to provide intellectual cover for what rulers wish to do. Austrianism was never tried because it doesn't approve of concentrated state power.
Nice propaganda try. Unregulated? Markets were regulated to an inch of their lives by 70 years of social democratic law and rule making, much of provided by Saint Roosevelt but even more from various adminstrations and congresses working hand in glove with highly compenstated lobbiests. It was markets response to massive regulation that motivated them to create the various insturments that led to our present crisis. The laws and regulations governing markets and our society fill volumes that occupy many, many feet of shelf space. There is an alphabet soup of large ostensibly competent regulatory bodies to administer this universe of laws and regulations. It is a wonderful social democratic move to blame a lack of regulation of a problem caused to too much regulation just as they are blaming a failure of massive stimulus on too little stimulus. Sly.
Professor Jeffrey Friedman, for example, blames the whole crisis on law and rule making so complicated and extensive (notice that these days laws are 2-3000 pages long, almost unredable and extraordinarily referential) that no one at this point knows all the rules and how they interact with each other in chaotic fashion. This overcomplicated and preferential law and rule making coupled with Basel I & II results in outcomes that no one can predict.
http://www.criticalreview.com/crf/pdfs/Friedman_intro21_23.pdf
http://www.criticalreview.com/crf/current_issue21_23.html
For those who missed Professor Codevilla's recent essay on our betters knowing what's best for us:
http://spectator.org/archives/2010/07/16/americas-ruling-class-and-the/print
+++
save and printed. i'll forward that article to many friends before it also disappears.
thanks for the link.
Give a bunch of hacks a little knowledge, and a fancy title which, for some inexplicable reason, commands the obedience those make policies regarding an object about which they have little understanding, and hubris will take care of the rest.
The natives again restless. Someone must be sacrificed to the volcano to keep up pretense of omnipotence however, the high priests are no longer one step ahead of those subjigated by means of their voodoo.
It's no way to run a railroad...
http://www.youtube.com/watch?v=HUrpWVFnmcI
As the close and play of JMK continues
http://www.youtube.com/watch?v=HNTxr2NJHa0
Those of us unwilling to be humble have a terrible tendency to have it thrust upon us. God has a way of doing that!
Choose to be humble. Don't make Him force it upon you.
Unfortunately, this is true collectively as well. I suspect we will soon learn this -- the HARD way!
Thanks! A word to the wise is sufficient!
Awesome, must-see video!
http://cafehayek.com/2010/01/keynes-vs-hayek-rap-video.html
I see lack of (or captured) regulation as a major ingredient in the disaster being forced on us now and am not sure how the lowest tax rates since Keynes was alive count as a high-taxation regime.
Perhaps the proponents of OTC derivatives, shadow pools, and their complete opacity can speak up and tell us again exactly how their 'liquidity' is so great for capitalism and the United States; my lawn needs your bandini.
"when Keynesians arrogantly believed they could manage the economy and the business cycle."
I think they've given up on that.
Now they just want to manage society through Central Banks.
Or perhaps manage the expectations of society.
They can't.
Were fucked.
Just finished it. Thanks, ZH, for the great stuff.
It could've been written yesterday. Much of it should be quoted regularly by off-MSM commentators. One sample:
It is indeed the source of the superiority of the market order, and the reason why, when it is not suppressed by the powers of government, it regularly displaces other types of order, that in the resulting allocation of resources more of the knowledge of particular facts will be utilized which exists only dispersed among uncounted persons, than any one person can possess.
This is a day in the life of most ZH'er. Have a look-see.
http://www.economicnoise.com/wp-content/uploads/2010/07/day-in-life-poli...
This one is funny too:
http://www.economicnoise.com/wp-content/uploads/2010/07/cartoonRMqdMzvDK...
Your post contradicts itself.
GBPUSD upside continues, since daily and weekly charts remain bullish.
http://stockmarket618.wordpress.com/about
"A free-market economy is a self-correcting mechanism"
That sounds a lot like market fundamentalism. The magical hand of the markets will self correct same as the hand of god will smite those heathens...
Typical BS.
Walt Whitman (1819–1892). Leaves of Grass. 1900.
82. Song of the Open Road
http://bartleby.net/142/82.html
.
AFOOT and light-hearted, I take to the open road, Healthy, free, the world before me, The long brown path before me, leading wherever I choose. Henceforth I ask not good-fortune—I myself am good fortune; Henceforth I whimper no more, postpone no more, need nothing, 5 Strong and content, I travel the open road. The earth—that is sufficient; I do not want the constellations any nearer; I know they are very well where they are; I know they suffice for those who belong to them. 10 (Still here I carry my old delicious burdens; I carry them, men and women—I carry them with me wherever I go; I swear it is impossible for me to get rid of them; I am fill’d with them, and I will fill them in return.) 2You road I enter upon and look around! I believe you are not all that is here; 15 I believe that much unseen is also here. AFOOT and light-hearted, I take to the open road, Healthy, free, the world before me, The long brown path before me, leading wherever I choose. Henceforth I ask not good-fortune—I myself am good fortune; Henceforth I whimper no more, postpone no more, need nothing, 5 Strong and content, I travel the open road. The earth—that is sufficient; I do not want the constellations any nearer; I know they are very well where they are; I know they suffice for those who belong to them. 10 (Still here I carry my old delicious burdens; I carry them, men and women—I carry them with me wherever I go; I swear it is impossible for me to get rid of them; I am fill’d with them, and I will fill them in return.) 2
You road I enter upon and look around! I believe you are not all that is here; 15 I believe that much unseen is also here
..
.
Where weary folk toil, black with smoke, And hear but whistles scream, I went, all fresh from dawn and dew To carry them a dream. I went to bitter lanes and dark, Who once had known the sky, To carry them a dream-and found They had more dreams than I.
Mary Carolyn Davies
It’s a interesting news,i like it.Additionally,wellcome to my website prettyboots.org ,here are so many UGGS On Sale such as:UGG Elsey wedge|UGG Elsey wedge black|UGG Elsey wedge chestnut|UGG Elsey wedge espresso|UGG Langley|UGG Langley black|UGG Langley chestnut|UGG Lo Pro Button|UGG Lo Pro Button black|UGG Lo Pro Button blue|UGG Lo Pro Button cream|UGG Mayfaire|UGG Mayfaire black|UGG Mayfaire chestnut|UGG Mayfaire chocolate|UGG Mayfaire sand|UGG Mayfaire red|UGG Nightfall|UGG Nightfall black|UGG Nightfall chestnut|UGG Nightfall chocolate|UGG Nightfall sand|UGG Sundance II|UGG Sundance II black|UGG Sundance II chestnut|UGG Sundance II chocolate|UGG Sundance II sand|UGG Ultimate Bind|UGG Ultimate Bind black|UGG Ultimate Bind chestnut|UGG Ultimate Bind chocolate|UGG Ultimate Bind sand|UGG Ultra Short|UGG Ultra Short chocolate|UGG Ultra Short sand|UGG Ultra Short black|UGG Ultra Tall|UGG Ultra Tall chestnut|UGG Ultra Tall sand|UGG Ultra Tall balck|UGG Ultra Tall chocolate|UGG Suede|UGG Suede black|UGG Suede chestnut|UGG Suede sand|UGG upside|UGG upside black|UGG upside chestnut|UGG upside mocha|UGG Roxy Tall|UGG Roxy Tall black|UGG Roxy Tall chestnut|UGG Roxy Tall chocolate|UGG Roxy Tall sand|UGG seline|UGG seline black|UGG seline chestnut|UGG Corinth Boots|UGG Liberty|UGG Liberty black|UGG Liberty cigar|UGG Highkoo|UGG Highkoo amber brown|UGG Highkoo espresso|UGG Highkoo grey|UGG Highkoo black|UGG Knightsbridge|UGG Knightsbridge black|UGG Knightsbridge chestnut|UGG Knightsbridge grey|UGG Knightsbridge sand|UGG Knightsbridge chocolate|UGG Adirondack|UGG Adirondack brown|UGG Adirondack chocolate|UGG Suburb Crochet|UGG Suburb Crochet black|UGG Suburb Crochet chestnut|UGG Suburb Crochet chocolate|UGG Suburb Crochet grey|UGG Suburb Crochet white|UGG Kensington|UGG Kensington black|UGG Kensington chestnut|UGG Roseberry|UGG Roseberry black|UGG Roseberry sand|UGG Gaviota|UGG Gaviota black|UGG Gaviota chestnut|UGG Gaviota chocolate|UGG Desoto|UGG Desoto black|UGG Desoto chestnut|UGG Desoto chocolate|UGG Brookfield Tall|UGG Brookfield Tall black|UGG Brookfield Tall chocolate|UGG Gissella|UGG Gissella black|UGG Gissella chestnut|UGG Gissella espresso|UGG Payton|UGG Payton black|UGG Payton chestnut|UGG Payton red|UGG Bailey Button Triplet|UGG Bailey Button Triplet black|UGG Bailey Button Triplet chestnut|UGG Bailey Button Triplet chocolate|UGG Bailey Button Triplet grey|UGG Bailey Button Triplet sand|There are so much style of cheap uggs for sale ,so once you go to my website you will be very surprise.