Terminology discussion: The phrase bubble economy accurately describes the inflated, vulnerable aspect of corporation valuation, stock prices, housing values, etc. But it sounds too cute and gentle. Yes, lots of people lost their homes, businesses, and jobs, but it was all just one of those things that hippies and yoga teachers sigh and can regard with "radical detachment." There's a Hindi word for this, I've heard it but can't recall it. Yet you see my image, I'm sure. Yes, a bubble burst, but bubbles do, sometimes. Though bubbles are pretty things and who would discourage them?
We need something uglier. What we call "bubbles" are pimple economies, boil economies, cyst economies. They need to be lanced, then supervised to makes sure nothing unsafe lands on the innocent. It takes time and attention. Libertarians talk a good game about limited government, but they need to jump on opportunities for government to supervise the lancing of boils as well as can be managed, recognising that everyone in those scenarios is likely a crook who needs the lash, not "market freedom." Once you've crossed a certain line, market freedom is for Other People, not you anymore. I'm sorta big on David Stockman at this point, who I wish could be put in charge of something important in the economy.
I think terminology matters in the PR battles of culture.
Tumor of lies?
ReplyDeleteYou got THAT right, AVI!
ReplyDelete(clearing throat) Speaking as t/h/e/ /o/f/f/i/c/i/ -- /a/n/ /o/f/f/i/c/i/a/l/ /s/p/o/k/e/s/-- one of those libertarians over there... are not most recent examples of bubbles government-forced? The real estate zit was - as far as I can tell - pumped up very deliberately as a substitute for the tech zit. The current stock-market zit also seems to me to be pumped up, partly negatively (where else are you going to put money?) and partly positively.
ReplyDeleteIsn't this more of an argument for having government not do that in the first place?
The tech bubble would be an exception, possibly, but it was more of a stock market bubble than anything else - overly optimistic investors dropped way too much money on tech startups in the expectation of an IPO payoff. And I don't remember anyone calling for a taxpayer bailout of tech stocks or the tech industry - although perhaps the rapid expansion of the H1-B program was intended as such a bailout. (If we look at it that way, we see another problem, because the H1-B program has the purpose of depressing pay for American tech workers, and it's starting to have the effect of locking Americans out of that industry.) And meanwhile the stock compensation rules were changed to discourage traditional-style tech startups without a huge blob of investor capital.
I'm not sure this is an argument against libertarianism.
None of it is the libertarians fault. But their solutions only theoretically include the sharp regulations which lance the boil. John Sununu was a darn libertarian conservative who saw what must be done, but couldn't even get the other libertarians on board to make a stink. In practice, they don't want to be more than hall monitors in a few schools, when the National Guard is required.
ReplyDeleteMy point was, more or less, that the (or a) libertarian solution is for government not to jab a wad of poison under the skin of the body politic in the first place, thus avoiding the boil, and therefore the need to lance it.
ReplyDeleteBut I have a feeling that possibly I am talking past your point. Can you be more specific about what should be done that libertarians aren't on board with?
If we were more libertarian, we wouldn't have the boil to begin with, or much less of one. But once it's there, there is too great a tendency to let market forces correct on their own. Alcoa's board should have their email frozen and be whipped in the public stocks before being sent to prison, but libertarians only seem to like that in theory.
ReplyDeleteThere is this tendency to rail about theory while not putting in the grind and relentless PR to do real work. What I liked about John Sununu is that he actually set his staff to researching and typing over any crony capitalism battle that looked winnable. Few do that. Even some I greatly like.
I think the small-town libertarians around here do better. They don't make grand speeches but they try and focus on a property or education issue within a 20-mile radius and band together to get it done. They sometimes succeed, unnoticed, unthanked.
More of that.
Feh. Libertarians aren't about proactive things like "lancing boils". They believe only in post-bursting cleanup. Look at their mindless post-Iraq opposition to action there. "Nothing happened, nothing would have". Pretty much the same argument about the year 2000 issue. Can't be defended or refuted. But any rational person should grasp "possibly wrong, possibly SERIOUSLY wrong."
ReplyDeleteBTW -- that's "Libertarians", not "libertarians". There's a massive difference in foreign policy approach. Libs are an anti-war bunch at all costs. Purest Isolationist at heart. If they had their way, the world would belong to Nazi Germany and Imperial Japan.
ReplyDeleteGood. Personally, I say heads on pikes when irked beyond endurance by the white collar thieves and swindlers! And mutter about the failure of anti-trust laws...I am all for liberty (an ancestor wrote a certain declaration, and plenty of others fought against tyrants) but not looting and piracy.
ReplyDelete