The dreadful Edmund Conway, Keynesian extraordinaire, writes Torygraph articles so thoroughly full of wrong-headed nonsense that I can barely bring myself to get to the end of them, but they're still worth flogging through if you want to hear the mafia view on what should be done.
Matthew d'Ancona, on the other hand, because he has more of a political bent, is more easily able to see through the hubristic cloud of Gordon Brown and spot him for the gangster that he is. He has written an excellent piece, in the Torygraph, which was good enough to force me to add a comment, as below. As usual, I struggled to get it in under the 4,000 character limit, but I made it in the end:
Posted by Jack Maturin on October 12, 2008 9:01 AM
The people of Britain deserve Gordon Brown if they are foolish enough to be impressed by his current manic-depressive hubris. As the man who told us he had abolished boom and bust, he is, along with Alan Greenspan, George W. Bush, and Ben Bernanke, one of the main culprits in this entire disastrous affair.
They have presided over easy credit for the last ten years, that is, the creation of new "money" out of thin air, to help fund their "NICE decade”, to fool voters into thinking these men were beneficent gods rather than feckless wasteful idiots. And now the chickens are roosting, instead of these men owning up to their stupidity, they are thrashing around trying to blame everyone else, with the exception perhaps of Alan Greenspan; as a former believer in the gold standard, he is probably wise to keep his mouth shut.
His decade-long deluge of new government-issued money, particularly following the dot com crisis, leveraged by the government-regulated fractional reserve system, fooled the rest of us into thinking we were wealthier than we truly were. This confusion of money as a source of wealth as opposed to merely being a medium of exchange, enabled a wasteful smorgasbord of debt-ridden partying. This malinvestment of metaphorical bottles of booze at this “NICE decade” party, is now being liquidated, when it could have been spent instead on productive items. We have consumed this wealth and it will never come back. We ought to learn to get over it.
Where some of us bought easy-credit booze, by sucking up equity from our houses, and drinking ourselves into a happy oblivion presided over by the mighty Bush and Brown, we should have bought shovels and pick-axes instead. Now all we have left in our possession is a cold bath full of empty bottles worth tuppence ha’penny each, rather than a busy shed full of productive capital equipment.
That is the problem. Useful capital has been malinvested in leisure goods with little liquidation value, when it could have been spent on productive goods with high productive capacity. That is where the money has gone. The drinks have run out and all the impotent governments of the world can do is to threaten to nationalize the off-licenses that sold us the booze. Yes, at gunpoint, the off-license owners may hand over a few more bottles to keep the party going a little longer, but then they’ll run out again due to the immutable laws of supply and demand; ask Zimbabweans about that.
Before then, of course, the mafia government gun men will come up with yet more Byzantine rules as to who gets what, though most of the goodies will still somehow manage to find their way to their friends, despite all of these rules.
So what should our overlord mafia bosses do?
Absolutely nothing. They should have let the bubble burst with Bear Stearns and let that go under. That would have encouraged the others to sort themselves out. Yes, this is an enormous bubble and its natural implosion would have caused a lot of pain and a lot more bankruptcies, but this endless propping up of the bubble by the idiots in government who caused this mess, through their issuance of easy central bank credit, will cause a lot more pain over a lot more years.
As the great Jim Rogers has said, they can still choose to do nothing. Of course they won’t. They will intervene endlessly, just as the fool F.D.R did, and turn this necessary recession into an unnecessary depression. If we are fooled by these gangsters into believing that this really had nothing to do with them and that they are the best people to sort it all out, then all of their investment in government education will have finally paid off, especially their provision of thousands of government jobs for Keynesian economists trained at government-worshipping economics schools and their government licensing of the Keynesian-dominated financial press.
We will have become the stupidest people in history. Well done Gordon Brown.