Economic Guru: Wall Street Rescue Plan is Wrong

(The identity of the economic expert is revealed at the end of the interview….)

Q: In view of the current crisis, don`t you think that corporations, especially banks have a social responsibility?”

A: “So the question is, do corporate executives, provided they stay within the law, have responsibilities in their business activities other than to make as much money for their stockholders as possible? And my answer to that is, no they do not”

Q: Under the circumstances it seems obvious that “leave the markets alone” is no longer tenable and that the government is after all the only reliable institution to turn to…

A: “The government solution to a problem is usually as bad as the problem.”

Q: Many people think that the main cause of this crisis is unbridled greed of bankers and investors. What is your response to these allegations?

A: “What kind of society isn’t structured on greed? The problem of social organization is how to set up an arrangement under which greed will do the least harm; capitalism is that kind of a system”

Q: The government aims to prevent a further spread of the crisis and to restore confidence in the banking system (the banks don´t trust each other anymore..) So is public critisicm about the rescue of “arrogant bankers” really justified?

A: “One of the great mistakes is to judge policies and programs by their intentions rather than their results.”

Q: “Do you think the accusations, that President Bush, Sec. Paulson and others have exaggerated the crisis to stampede congress into accepting the  hastily produced “rescue plan” at the expense of taxpayers are justified?

The fundamental threat to freedom is power to coerce, be it in the hands of a monarch, a dictator, an oligarchy, or a momentary majority.”

Only a crisis, real or perceived, produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes politically inevitable.

Q: Is it morally acceptable to let the taxpayers pay for the recklessness of Wall Street? To force them to act as guarantors for an astronomical amount of debt,  toxic loans and practice a kind of banking welfare?

A: “If I’m going to do good with other peoples’ money, I first have to take it away from them. That means, that the welfare state philosophy of doing good with other peoples’ money (…) is a philosophy of violence and corrosion. It’s against freedom, because I have to use force to get the money.

In the second place, very few people spend other peoples’ money as carefully as they spend their own.”

This imaginary interview was conducted with Milton Friedman, the “most prominent economist of the 20th century” and greatest advocate of deregulation (this translates into government is the source of all evil.. – lets drown it in the bathtub…)

The quotations are attributed to Friedman, I just used them as “answers” to show that these principles can only survive by applying them very selectively and are rather like the absurd claim of US militarists: it´s not the weapons, it´s who has them…..

For a deeper analysis of Friedmanite / Friedmanesque or even Friedmaniac policies see also

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Filed under Economy, Managing Perceptions, Politics, Society, US

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