Friday, May 8, 2009
Why the Government's Attempt to Instill False Confidence Will Backfire
The government is doing its best to try to "restore confidence" in the economy. Indeed, Obama's top economics advisors believe they can fool people into believing that everything is fine, and then the economy will recover.
And for that reason, defenders of the status quo think that it is important for everyone to keep quiet about how severe the crisis really is.
Are they right?
No.
As economist Irving Fisher pointed out (as recounted by economist Steve Keen):
Hobbled by this naive belief in equilibrium, the economics profession was as unprepared for today’s crisis as it had been for the Great Depression. Now that the crisis is well and truly with us, all conventional “neoclassical” economists can offer is the hope that the crisis can be overcome by a good, strong dose of confidence.
From [Irving] Fisher’s point of view, such a belief is futile. In an economy with an excessive level of debt and low inflation, he argued that confidence was irrelevant–and in fact dangerously misleading, as he knew from painful personal experience.
13 comments:
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I think you are spot on, per usual. One idea you may wish to consider. People will not trust those in power for good reason. They are not to be trusted. This dynamic is not a function of psychology but simply rationality. If they want that confidence they will have to earn it through honest hard work. Unfortunately, the criminals in power have never worked an honest day in their lives. They would much rather continue lying cheating and stealing, hence the current situation.
ReplyDeleteBut things ARE BETTER! We got rid of the worst President in history just a few short months ago.
ReplyDeleteWe're creating the biggest moral-hazard minefield in history. Banks will get even bigger than too-big-to-fail, as government-sponsored ones engulf smaller competitors. Bad CEOs will stay in power. Inflation will likely be quite bad, contributing to the problem. Savers get screwed, debtors get off.
ReplyDeleteBut this irrational optimism will probably continue for a while. Reflating bubbles does work temporarily. But it precludes any real growth from the situation. What a hot mess.
Confidence or trust? Which does the average person rely on to guide judgment?
ReplyDeleteThe problem is that the Wall Street shysters think that their con[fidence] games suffice to bilk us out of our earnings. That can only work as long as we trust their system. Now that the trust has been permanently broken, there is no way they can succeed at fooling us into playing into their confidence scams.
Some people think that GS has been practically single-handedly engineering the recent stock market rally, as a part of the con game, in order to pacify us for the stress test results, and also to engineer another pump-and-dump.
......
For the con men, confidence is a game that can be played over and over, with a new scheme or on a new mark each time. But for the aggregate of the populace, once trust has been broken, it is not possible to con us again.
Putting a happy face on a grim situation = LYING. Ultimately, humanity's biggest problem is that psychopathic personality traits are heritable. It's a common error to think of psychopathy in its most extreme form, i.e. cold-blooded thrill killers. In fact, pyschopathic traits are a continuum from mild to extreme. The hallmarks are an ability to lie with a perfectly straight face and suppressed normal emotions such as guilt, shame, compassion, or empathy.
ReplyDeleteIn a tribal or village situation where everyone knew everyone else, these traits were kept in check in the genepool because no one would tolerate the assholes. In a mass, anonymous "civilization" all the stops are pulled out and psychopaths rise to the top of any and all hierarchical organizations: corporate, military, government, and church, because lying is useful to those organizations.
Look in the faces of all the "leaders" from Larry Summers to Barrack Obama: you are looking at smooth, compassionless liars. Until we drum all of them out of positions of power, we will have Rule by Psychopath.
New American Century..........
ReplyDeleteFAILING UPWARD ONWARD
http://21stcenturyreversepyramid.blogspot.com/
Taxpayer funded campaign funds and outlawing lobbying could get us well on the way to us having a say. Fry the guys that tortured and lied us into war should go a long way to restoring trust.
ReplyDeleteWe replaced Bush with the man who the baton was passed to. This replacement will not improve anything. The bankers will have their way regardless. Unless a President is willing to face assassination, nothing with CHANGE.
ReplyDeleteThe Fat Cats at the top live too far removed from the lives of ordinary people to ever really care about the average American.
ReplyDeleteThey can write us all off as lazy or stupid without ever really having to think about the challenges we face.
"When you live inside the pleasure dome
You don't ever wanna go back home."
-David Byrne
Trillions of dollars in assets of the American people have just been stolen and transferred to internationalist world bankers and we're supposed to be confident? It looks like we're slaves to me.
ReplyDeleteAmen!
ReplyDeletePissing down my back and telling me it's raining just doesn't work anymore.
ReplyDeleteHellooooooo. The American people have just been looted - again - by the world bankers. The tribe has been doing it regularly since 1913.
ReplyDelete