Quote:
Originally Posted by Agent 488
(Post 18290165)
cool. what's his solution? his map for getting from a to b?
|
Quote:
Originally Posted by mynameisjim
(Post 18290205)
The real trick is finding solutions that you can implement within the current system.
...
We all know what the problem is, we need someone who can fix it.
|
That's the whole problem. There is no way the government, a president, a senator, a congress man etc can fix the problem.
In economic therms, we currently have a problem of malinvestment.
http://wiki.mises.org/wiki/Malinvestment :
Quote:
Malinvestment is an investment in wrong lines of production, which inevitably lead to wasted capital and economic losses, subsequently requiring the reallocation of resources to more productive uses. "Wrong" in this sense means "incorrect" or "mistaken" from the point of view of the real long-term needs and demands of the economy, if those needs and demands were expressed with the correct price signals in the free market. Austrians believe systemic malinvestments occur because of unnecessary and counterproductive intervention in the free market, distorting price signals and misleading investors and entrepeneurs. For Austrians, prices are an essential information channel through which market participants communicate their demands and cause resources to be allocated to satisfy these demands appropriately. If the government or banks distort, confuse or mislead investors and market participants by not permitting the price mechanism to work, malinvestment will be the inevitable result.
|
John Mills:
Panics do not destroy capital; they merely reveal the extent to which it has been destroyed by its betrayal into hopelessly unproductive works.
Ludwig von mises:
The popularity of inflation and credit expansion, the ultimate source of the repeated attempts to render people prosperous by credit expansion, and thus the cause of the cyclical fluctuations of business, manifests itself clearly in the customary terminology. The boom is called good business, prosperity, and upswing.
Its unavoidable aftermath, the readjustment of conditions to the real data of the market, is called crisis, slump, bad business, depression. People rebel against the insight that the disturbing element is to be seen in the malinvestment and the overconsumption of the boom period and that such an artificially induced boom is doomed.
They are looking for the philosophers' stone to make it last.
Murray Rothbard in 'America's Great Depression':
A credit expansion may
appear to render submarginal capital profitable once more, but this too will be malinvestment, and the now greater error will be exposed when this boom is over. Thus, credit expansion generates the business cycle regardless of the existence of unemployed factors.
Credit expansion in the midst of unemployment will create more distortions and malinvestments, delay recovery from the preceding boom, and make a more grueling recovery necessary in the future. While it is true that the unemployed factors are not now diverted from more valuable uses as employed factors would be (since they were speculatively idle or malinvested instead of employed), the other complementary factors will be diverted into working with them, and these factors will be malinvested and wasted. Moreover, all the other distorting effects of credit expansion will still follow, and a depression will be necessary to correct the new distortion.
So in short: No politician is ever going to be able to
fix things. By trying to fix things he will only make things worse. I respect Paul for not trying to fix things, but for trying to educate people on the underlying problems.
Does that mean we should just sit back and do nothing? No, we should stop hoping for politicians to come up with some
deus ex machina kind of solution. What we should do as individuals is save money, prepare for a rainy day (lots of them), protect our savings against inflation and as entrepreneurs: look for holes in the market and start filling them.
