Comments on: The Bubble Deniers Deny that Their Own Stimulus Caused it

By: Annie

Annie — Wed, 22 Jul 2009 01:37:52 +0000

I have a feeling that the clawing back of dollars from the public will be slightly more incidious. Along with the Emissions Trading Scheme, you will likely see a big cut back on the PBS, increases on "fees", new charges cloaked in subtefuge (like the proposed $30 charge on televisions to help with the recycling of them). The Tax review will be very interesting.

On a state level I saw a curious inclusion on my rego. A $23 fee for traffic improvement. I rang up transport and they said it was for traffic lights!!!!!! you gotta laugh

By: Greg Atkinson

Greg Atkinson — Wed, 22 Jul 2009 00:54:50 +0000

Ned S - yes taxpayers will be footing the bill for this mess via a tax you have without calling it a tax: the Emissions Trading Scheme

By: Ned S

Ned S — Tue, 21 Jul 2009 23:10:39 +0000

One thing we aren't hearing much of yet, which probably has to be expected eventually, is legislative changes aimed at preventing the future formation of credit driven bubbles. Allowing the creative destruction side of capitalism to fix problems has been declared an unacceptable alternative. And it just mightn't be realistic to expect that tax payers can be stiffed for multiple trillions of dollars every few years to stabilise the world's financial systems.

By: NickW

NickW — Tue, 21 Jul 2009 12:49:01 +0000

Derek: "CDO's weren't the root cause of the GFC" Surely that is a circular argument? Easy credit was certainly the spark that lit the fire but easy credit in itself would have been basically self regulating in a relatively short period. All credit - easy or otherwise - depends upon the actual availability of money to lend as credit. Any period of easy credit will lead to booms, bubbles, busts and tears before bedtime but we have had these in the past and they are well within the natural order of things financial. No, what set this time apart is those wonderful inventions- CDO's, SIV's, and all the alphabet soup of financial instruments which the money institutions invented, corruptly supported by the rating agencies, in order to create apparently limitless leveraging to the balance sheets and a bottomless pit of money to supply the credit. This was counterfeiting "money" on an enormous scale - enough to threaten the integrity of society - and I am only surprised that those who did it have never been charged with treason as enemies of the state.

By: dsylexic

dsylexic — Tue, 21 Jul 2009 10:53:24 +0000

dear mutt, er matt. your woeful understanding of 'free markets' that seemed to have ruled the roost underscores the brainwashing the dumb media and tv economists have achieved.if you think g'span was a free marketer or bernanke is the godsend of laissez faire types, shame on you.you might as well believe bush genuinely belived in them wmds

By: Ross

Ross — Tue, 21 Jul 2009 10:02:17 +0000

I travel with Derek and thethrillisgone. Bill's comment on the Yuan ignores the fact that the suppression of the Yuan was achieved using an effective defensive measure to restrain Chinese domestic inflation. Without that measure China's very real concern with internal stability would have been realised. From 1977 to now is an impressive run of primarily domestic reforms from the Chinese that translates directly into productivity gains and so far (so good for Australia) they don't look like turning their backs on Westphalian values.
That doesn't mean I disagree with Bill's take on the challenges that they face dealing with bubble collapse versions one and two and likely three.

By: Derek

Derek — Tue, 21 Jul 2009 02:00:10 +0000

CDO's weren't the root cause of the GFC. The cause of the GFC was rapid debt expansion via bubbling asset prices (homes). And the root cause of the debt expansion/asset bubble was low interest rates and loose lending policy. The problem was created by throwing fuel on a fire and we are still doing it to keep it burning. But we nearly out of fuel.

Also I don't blame free market capitalism, the way I see things it is the interference in the market that creates the issue rather than letting free markets sort themselves out. Agressive easing fiscal policy artificially affects the market, the fallout from the tech stock collapse should have been allowed to play out rather than making another bubble on its back to stop the fallout from the bursting of the first bubble. Debt is not our friend or our saviour, it is our enemy. If the debt binge was like a drinking binge, it appears we are trying to drink our way out of a hangover.

By: thethrillisgone

thethrillisgone — Tue, 21 Jul 2009 01:58:03 +0000

Well Mr. Bill may be an apologist for Adam Smith and the Oil Imperialists, but at least he's got Von Miser's CRACK UP BOOM explanation correct. And he is correct about that. And there isn't going to be any recovery until the debris and excesses of the Finance Capitalist's decades long orgy of easy money delusions has been painfully swept away. Recovery in 2010 ? What a crock. As too the inscrutable Chinese, who knows ? At least they have running factories and not a lot of bankrupt bankers thinking their entitled to mega million dollar bonuses. The Freakin' Red Commies are now the #1 Industrial Society, ever, on this planet. And the "Best and Freest" country is now the BIGGEST DEADBEATS. As to the near future, the hell with stocks, especially if it's just another speculative bubble with more easy money. It smells so damn rotten. The biggest mistake anybody can make is believing: "things will return to normal". I don't know, I'm old; I don't give a rat's ass, plus I like rice. And I'm enjoying my permanent staycation getting things done and starting work on projects I only dreamed of.

By: Matt

Matt — Mon, 20 Jul 2009 07:51:11 +0000

What self serving rot!
Firstly, the premise of the article is a strawman. Free marketeers have had the upper hand in central banks, finance ministries and universities for at least 20 years now (30 or more in most western nations.)
Secondly, the root cause of the GFC - CDO's, and the debt they enabled - were not engineered in the "defensive redoubts" of socialist planners, but in the bastions of free market capitalism - investment banks and insurance companies!