Saturday, 2 January 2010

Not at any point.

"Laissez-nous faire"

Interventionist politics have played a growing role in all our economic lives. Each bailout is a step that is seldom regained and as the government steps in, we do less. We expect to be able to fail and be saved. This only makes more failures.There is a single economic principle that has resulted the the phenomenal growth that we have experienced in the last 200 years. This is the free market.

Laissez faire, telle devrait ĂȘtre la devise de toute puissance publique, depuis que le monde est civilisĂ©.

In contradiction to common mis-comprehensions, market cycles are induced by a lag effect from intervention and not a market principle (as is generally taught).

The oft overlooked truth is that business cycles are a function of intervention and not free markets. The common counter example to this is the Great Depression. The fallacy is that this was neither an expression of free markets nor of a failure due to capitalism. Rather, the depression is a response to restricted trade and monetary policy. The US both introduced restrictive trade tariffs resulting in the collapse of international markets as well as restricting the money supply.

The introduction of regulations restricting and controlling the banking industry resulted in a tightened fiscal policy fewer loans being available. This was heightened with the crowding out effect as the US fed. used funds for the "new deal" policy creating an environment where no money was available to business. With the increased enforcement of anti-trust legislation, business withered. The consequence, a larger federal government in the US and the spread of socialist policies that drove the burgeoning free markets into the grave.

Why should we treat businessmen and women differently. We allow sports people to earn exorbitant sums. We have rock stars earn as much as they can. We need to come into a world where a process of rewards attract the best people to business. This means treating the business people as the rock stars. This means not interfering and rewarding those at the top.

When will people wake up and see that the inefficiencies of the world are associated with group think and governments? It is about time that people decided to become free and think for themselves!

Friday, 1 January 2010

A review of trash

I will quickly post a review of the most trashy book outside of the publishing house of Mills and Boon. A book I have had (today) the great misfortune to have read and that I fear will haunt me forever more due at least in part to the excessively partisan nature of this book.The book I refer to is;

Akerlof, GA and Shiller, R (2009), “Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism” Princeton Press

The book purports to be a “rational” investigation, yet it deviates from this from the first paragraph.

It is a collection of misquotes, fallacies, rhetoric and dogma presented as a scientific exploration into economics. Do not be fooled, this is nothing of the sort. This is more an exaltation of dogmatic believe than anything else.

And that was just the best part.

It went downhill from there. Facts, why bother when you can distort one side of an argument with unsupportable assertions.

This book was truly one of the greatest wastes of time I have ever engaged in.

Tuesday, 29 December 2009

Wet, wet, wet

Not much to say at the moment. We have had 640mm of rain (40% of what we normally get in a year) in the last 2 days. We had over 500 mm in 2 hours. Basically, more rain than I have ever seen anywhere in Australia and definitely nothing like we have seen at the farm in the decade here (and not like anything in the recorded history of the farm).

I will post photos later in the week.

As an example, we have a bridge out (which we need to rebuild). Not your average household expense, but we own the road and have to maintain it.

One of our neighbours has no power (we do). I know this as his power pole in sitting in one of our fields having washed away 2 days ago.

Today is the first day I have been able to go and check the damage. In the last couple days the volume of rain has precluded checking. One of the creeks (usually 30-50cm deep was up to 3.5 metres deep.