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Investment Analysis Clubs / Macro Economic Trends and Risks
|Subject: Re: “This Time it is Different”||Date: 10/5/2012 6:18 AM|
|Author: MadCapitalist||Number: 405327 of 508316|
When there is massive government intervention, it is not even close to a free market.
If it is not a free arket why do they have to intervene?
They don't *have* to intervene. They *want* to intervene.
Free markets are not perfect, and that gives interventionists the opening they need to intervene. Unfortunately, their interventions invariably make things worse. That does not matter to them though. All that matters is that they have good *intentions*. If they have good intentions, then they just assume that the results of their interventions were good and that they just didn't do enough of it.
It's hard enough to predict what the consequences of government intervention are going to be, but government interventionists deliberately avoid acknowledging even the more obvious ways that government intervention may be contributing to the problem, which just makes the situation that much worse.
For example, consider deposit insurance. How might deposit insurance change the behavior of depositors and change the behavior of banks in negative ways?
And all this assumes that the intention of interventionists is noble. I think that it is pretty clear that there is a bit of "regulatory capture" going on. As I have said before, when you have Big Government deciding the allocation of resources instead of the free market, you can be sure that special interests will influence politicians to get their hands on those resources.
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