Be Wary Of Calls For More Regulation

Hello, my name is The Commentator.

Where have I been?

None of your business but check this out.

Excerpt:

Over the short term the recently-announced economic stimulus package will stimulate economic activity and distort the pricing structure in some economic sectors. Much of this activity will occur while the market will still be rife with distorted signals caused by the earlier round of economic stimulus that caused the boom in house construction. The upheavals in the housing sector and automobile manufacturing sector are essentially market corrections that attempt to liquidate malinvestment. The high-tech bust and the dot-com meltdown of 2000 were also market corrections to the massive malinvestment that occurred in the high-tech sector. I was an investment advisor during this period. That's exactly what it was. When crazy things happen it's extremely important to stand back and soberly assess the problem. Rather, our first reaction is to always demand more regulation. What astounds me is to listen to politicians act as if a)they can do something about it and b) speak as though their own hands are clean in the mess. Naturally, their only unimaginative solution is to, well, regulate. Yawn.

During the 1990s the government and Central Bank of Japan tried to stimulate an economy that was rife with malinvestment. The Japanese economy remained essentially stagnant despite state efforts to stimulate economic activity through a variety of public works projects. An economy that remains essentially stagnant while the government prints and spends new money on a variety of projects defies Keynesian economic theory, which provides no explanation for such economic events. Again, for most of my time in financial services, Japan was a stagnant economy. While I'm far from an expert on Japanese economics, his position was one often cited by some economists at the time.

Despite Keynesian economic theory having repeatedly been debunked and refuted by numerous free-market economists, it is the theory to which western governmental economic advisors wholeheartedly adhere. They are therefore almost predestined to follow Japan’s failed attempts to revive an ailing economy. They will invariably follow the economic path of Julius Nyerere (PhD in Marxist economics—London School of Economics) who after becoming head of state of a then-newly independent Tanganyika, tried to improve the idyllic economy of the new Tanzania using Marxist theory. The result was an economic catastrophe that included famine." Marxism is misunderstood is the excuse no doubt. It's not flawed, just misused and abused by the wrong people. Funny how Marxism always manages to attract the wrong thinkers.