I thought this was pretty rich, although off-topic (its about what "we should do to change things", not what "we should do to trade what we cannot change"). Here (click
here from Ritholtz.Com) is Nobel Prize winning economist Joe Stiglitiz's 6 hard lessons:
"
1. Markets are not self-correcting, and without adequate regulation, they are prone to excess.
2. There are many reasons for market failures. Too-big-to-fail
financial institutions had perverse incentives: Privatized gains,
socialized losses. .
3. When information is imperfect, markets often do not work well – and information imperfections are central in finance.
4. Keynesian policies do work. Countries, like Australia, that
implemented large, well-designed stimulus programs early emerged from
the crisis faster
5. There is more to monetary policy than just fighting inflation.
Excessive focus on inflation meant that some central banks ignored what
was happening to their financial markets. The costs of mild inflation
are miniscule compared to the costs imposed on economies when central
banks allow asset bubbles to grow unchecked.
6. Not all innovation leads to a more efficient and productive
economy – let alone a better society. Private incentives matter, and if
they are not properly aligned, the result can be excessive risk taking,
excessively shortsighted behavior, and distorted innovation."
Sound pretty reasonable, right? Here's a commenter's response:
"Hume Says:
Let’s try something different and equally plausible:
1. Governments are not self-correcting, and without adequate limitations, they are prone to giant mistakes.
2. There are many reasons for government failures. Too-fat
politicians had perverse incentives: Privatized gains, socialized
losses, no accountability.
3. When information is imperfect or too demanding to follow,
governments do not work well – and information imperfections are
central in politics.
4. Countries, like Australia, that have commodities depended economies emerged from the crisis faster.
5. There is more to monetary policy than just fighting unemployment
and external shocks. Excessive focus on unemployment and external
shocks meant that some central banks ignored what was happening to
their financial markets due to excessive monetary easing. Short term
gains from such policy are miniscule compared to the costs imposed on
economies when central banks cause asset bubbles to grow.
6. Not all regulation leads to a more efficient and productive
economy – let alone a better society. Private incentives matter, and if
they are distorted by badly written and implemented regulation, the
result can be muted growth, structural imbalance in the economy, and
distorted innovation."
Pretty on-target in my view, but "off-topic" because the US political situation is pretty desparately corrupted with no signs of reform anywhere.
MontyHigh, www.worldofwallstreet.us
Recent Comments