The Road to Recovery

Posted by $ bigjim 9 years, 10 months ago to Economics
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by John B Taylor, from City Journal
Mr Taylor shows why reading Hayek is more important today than ever.

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  • Posted by NOONBALLOON 9 years, 9 months ago
    Excellent article.

    When I look at the economic interventions (Gov. Ins.'d Risk Expansion, L/T int. rate manipulation, Stimulus Bailouts, Temporary Jobs Created or Maintained, QEx, along with the departure from legal prioritization of liability to GM bond holders, etc.), I am forced to tie them to a more Global perspective, and strategy. I'm forced to consider an experimental attempt at global re-balancing in terms of larger a economic conflict.

    Consider the concept/strategy of the leveraged consider that same concept in terms of a buy-out the size and scope of one the largest national economies on the globe. The debt requirements would of course be massive, and the inflation would, by necessity, be global, as would the effect on global prices and wage rates. Now, throw in the idea that the same management that is leveraging the buy-out also controls its own interest rates to finance the least temporarily.

    Is failure a prerequisite to success? Must we re-learn the hard lessons in a big way before we can return to the sound principles that lead to our original success? Can the planned failure of a mixed economy be turned around to the restoration of consistent principles, the rule of law, incentives that unleash the potential of every individual, and the efficiency of free markets within a contractually supported framework? What was solution offered by Greenspan's more contemporary model to step away from the monetary value reflected within the market of a gold standard? Has this corporation properly leveraged its shorter term capital infusions towards new technologies and systems that would streamline its production and innovation, or has it wasted the greater bulk of this borrowed capital? Can demand side policy work, under any circumstances and for the long-term, without supply side incentives? Can the snow ball of subsidization be brought to a halt?

    Let us hope that among the chaos, the odds of chance are with a resurrection of leadership that is overly committed to economic freedom as well as a strengthened argument for a new generation of principled management.
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