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Investment Analysis Clubs / Macro Economic Trends and Risks


Subject:  Re: “This Time it is Different” Date:  10/5/2012  4:21 AM
Author:  AdvocatusDiaboli Number:  405325 of 479876

And those regulations were?

MC approaches any given economic problem with the fixed assumption that whatever government does, it must be making things worse.
Also, he makes an elementary mistake.

In any industrialized economy, the government is intervening in every economic activity to some degree. It taxes, regulates liablity, emissions, disclosure, it standardizes, builds or regulates infrastructure etc.
(If it didn't do that, no modern industrialized economy would have evolved in the first place.)
Because of this, anything that goes wrong in the economy will have the government's fingerprints on it somewhere, and if you want to, you can always conclude that the government caused the problem.
MC wants to reach that conclusion very much and inevitably does.

MC looks at the specific way the financial sector blew itsself up and concludes that, because that specific way was influenced by regulation and government intervention, that means regulation and other government intervention caused the banks to blow themselves up.
That is not the case, however.
The truth is that the banking system is