Monday, December 8, 2008
London Banker on Values
"When a central bank thinks its house is on fire, it too will rush to save the thing valued most. In the [US], the central bank has rushed to save the bonuses and dividends of its Wall Street clientele by hiding away the bad assets that can no longer be foisted on gullible investors. ... I am disgusted by the central banks preserving the privileges of the financial elite in preference to the jobs, incomes and businesses powering the real economy. ... I consider the workers and businesses in the real economy as meriting greater protection that the financial elite. It is not merely that I think the financial elite little better than criminals for their irresponsible excess of recent years, but I fear long term harm and political instability will come from neglecting the needs of the real economy. ... If the democratically elected governments--through their appointed executives and central bankers--are free over an extended timespan to ignore the interests of the people, then how is a Western democracy superior to a Chinese bureaucracy? From looking at the policies and practices of the past year, the merits of Western democracy are not immediately apparent in ensuring that policy responses are aligned with the interests of the people. Even over the past decade, it is not clear that the policies of the democratic Western governments have aimed to strengthen and broaden the economy to benefit of the electorate rather than a narrow, self-serving elite", my emphasis, London Banker (LB), 28 November 2008, link: http://londonbanker.blogspot.com/2008/11/what-we-value-is-what-we-save-in-crisis.html.
Yes LB. As I wrote on 26 October 2008, there is a whiff of cordite in the air. Let the peckinsniffs of the Economist laugh, I see "political instability" may come out of the current bailouts. If the US gets the price inflation I expect, we should look to Germany, 1922-23 for a glimpse of our future. Not an attractive view. LB's comments are what I have become accustomed to from Mencius Moldbug at Unqualified Reservations or Jesse at Jesse's Cafe Americain.