Hussman: Fighting Recklessness with Recklessness
posted by Doug Reich @ 4:58 PM
Here is an interesting piece on the "impenetrably misguided policy response to this financial crisis, which seeks to address the downturn by encouraging more of what got us into this mess in the first place" by John Hussman. He discusses the U.S. Treasury's "toxic asset" plan and various other measures which do nothing to address the actual causes of the financial crisis and that will likely only exacerbate the problem.
This piece can be read alongside my below post on recent Fed policy and provides further evidence of the utter destruction being wrought by government interference in the economy. It also provides further evidence of the effects of bad philosophy on our lives. Economists and government officials, unable and/or unwilling to integrate facts with valid economic or moral principles or who simply wish to usurp ever more power, continue to propose and execute plans which entail massive abrogrations of individual rights and destroy the economy. Meanwhile, the bewildered American populace, intellectually disarmed by over 100 years of progressive education and modern philosophy, sits idly by hoping things will somehow get better.
This piece can be read alongside my below post on recent Fed policy and provides further evidence of the utter destruction being wrought by government interference in the economy. It also provides further evidence of the effects of bad philosophy on our lives. Economists and government officials, unable and/or unwilling to integrate facts with valid economic or moral principles or who simply wish to usurp ever more power, continue to propose and execute plans which entail massive abrogrations of individual rights and destroy the economy. Meanwhile, the bewildered American populace, intellectually disarmed by over 100 years of progressive education and modern philosophy, sits idly by hoping things will somehow get better.
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Great post Doug. This analysis is starting to pop up in many economics articles. Wrapping up the policy response with jargon such as quantitative easing is what makes it impenetrable. When you look at the situation clearly, the basic logic makes no sense. Easy money got us into this mess so the solution is easy money. Consumption got us into this mess so the solution is to stimulate consumption. It has to be impenetrable. Otherwise it would be obviously exposed as bankrupt.
Another similar article here: http://moneywatch.bnet.com/economic-news/blog/blog-war/the-stimulus-package-like-the-housing-bubble-only-better/114/?tag=content;col1
Another similar article here: http://moneywatch.bnet.com/economic-news/blog/blog-war/the-stimulus-package-like-the-housing-bubble-only-better/114/?tag=content;col1
Doug,
Great find. Did you happen to read the article of his that Hussman links to in the post you recommended? "On the Urgency of Restructuring Bank and Mortgage Debt..." http://www.hussmanfunds.com/wmc/wmc090330.htm. In it he gives several suggestions for how to address the current crisis without using taxpayer money. He also makes the case that because the underlying problem of at-risk mortgages has not been addressed, we are headed for another shock when a significant number of Alt-A's and Option ARMs start to reset next year. Again, he provides some possible practical solutions on how to manage mortgages, also without the need to pump in money from you and me, or our descendants. He either writes very clearly on these subjects, or I am actually beginning to understand this stuff.
Great find. Did you happen to read the article of his that Hussman links to in the post you recommended? "On the Urgency of Restructuring Bank and Mortgage Debt..." http://www.hussmanfunds.com/wmc/wmc090330.htm. In it he gives several suggestions for how to address the current crisis without using taxpayer money. He also makes the case that because the underlying problem of at-risk mortgages has not been addressed, we are headed for another shock when a significant number of Alt-A's and Option ARMs start to reset next year. Again, he provides some possible practical solutions on how to manage mortgages, also without the need to pump in money from you and me, or our descendants. He either writes very clearly on these subjects, or I am actually beginning to understand this stuff.
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