CNN: “More stock weakness in the works”
Had the stock markets plunged without a panicked, multi-trillion dollar spending spree, partial nationalization of banks, threats of more intervention, etc., etc., we all know that “laissez faire” would have been blamed. But instead, as Don Boudreaux has reminded us, the market is down 41% since the first trading day of September, when the Bobama Administration started wildly pouring money, er, “liquidity,” into the economy. It fell 20% in January and February, when the third term of the Bobama Administration began. But no one will blame it on the intervention (well, I do, at least partially). The failures of the intervention are reason enough for…..more intervention! If the potion the witch doctors give you doesn’t work, just take more and more and more of it! That’s the march of science for ya!
Bryan Caplan recently asked the following question: If the government had followed a laissez-faire policy for the last six months, and output, employment, housing, and financial markets stood exactly where they stand today, what fraction of people would conclude that “Events decisively prove that laissez-faire is a disaster”?
If you have a solution based on science we would like to hear it.
Well, Mr Obama is 46 days in office now, we should give him a chance. Surely, it is apparent that he is not able to “move” the economy within such a short time span (and in no event resposible for the current collapse). The US in 2010/2011 will be the proper standard of comparison…….
Let’s hope for the best – I bought a substantial amount of stocks a few months ago.
However, personally I think the current stimulus is a gigantic waste of time. Japan MK 2.
It’s not clear what Mr. Langford is seeking. A scientific explanation of what? I was making a simple point. Had the political decision makers done what I prefer, and not shoveled taxpayer money to failing firms, but instead allowed the market to adjust without pouring money down rat holes, I am quite confident that the 41% fall (as I write this, it has fallen yet further) would have been blamed on laissez faire. As it is, no one has blamed it on the lack of laissez faire. It’s the asymmetry in the standards of causal imputation that is striking.
If I knew which way stocks were going to go, I would be very rich. I’m not. (Actually, I am, in comparison to most humans throughout history, but not in comparison to the people who live and work around me.)
Tom, if you get to know which way the stocks will go just drop me a short line. I would be most grateful…;-)
P.S. In my above post I meant the stimulus “is a gigantic waste of money” (not time). That happens if you write on a blog while talking with somebody on skype.