Friday, 17 April 2009

Ignoring crisis causes means promoting causes of the crisis

An op-ed in today's Business Herald gives the perfect example of why nothing will be learned from the economic crisis by those whose schools of economic thought were responsible for making it happen.  Robert Wade, from the London School of Economics, ignores the credit bubble inflated by the Bank of England and the US Federal Reserve; ignores the US goverment's promotion of the sub-prime bubble; continues with the nonsense that "deregulation" was too blame; and promotes instead the canard that the solution to the crisis created by big, meddling government is even bigger and more intrusive government.

Alex Epstein writes in Canada's National Post that "Obama doesn't get the roots of the crisis."  Little wonder.  Neither do academic economists. 

I recommend to Mr Wade, and to Business Herald readers who want something better than they'd otherwise be reading, to avail themselves instead of the following three sites, where they won't find writers struggling to sweep uncomfortable facts about the crisis under the carpet.


  1. I found this excellent article, which sums it up.

    Clinton Democrats are to blame for the credit crunchI found one person who disagrees with the above article and that is Ruth.

    Ruth Quoted (another blog):
    It's not the fault of Bill Clinton/Democrats or something. Rates were high during Bush's reign. Funny how some people want to slap a political label on everything.Perhaps Ruth can elaborate a bit more on why she thinks the article was wrong to point the finger at Clinton's Democrats.

  2. FF, the thread you refer to was about credit card interest rates, if I recall. You blamed Clinton for current high cc i-rates!As I said in the rest of my reply, high rates are because of write-downs and high default rates. Always has been and always will be. Blaming financial woes on Clinton is common amongst the more dim-witted on the Right. Eight years of Republican rule has fallen down the memory hole. Clinton was more financially prudent that Bush or Obama by a long shot. But relax-- you can pay your cc in full before due date and avoid interest charges. Who knew?

    Anyway I am more interested in your tip sheet. One of the great things about technical analysis is that it leaves emotion behind, and I trust you are making some serious money, like I have been. We have this huge band of resistance between 7900-8500 on DOW. It seems to be respecting 7900 as support, and the Million Dollar question is... has the DOW got enough momentum and buying pressure this time around to push upwards through that band past 8500? If it has I think we could see DOW 10,000 by Northern Summer. VIX is showing the volatility is downtrending, which is encouraging as well.

    I said 2009 would be a year of opportunity and it surely is.


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