الشعر و الشعراء / Poetry & Poets قسم خاص لكتابة الاشعار... وبوح المشاعر ..

إضافة رد
 
LinkBack أدوات الموضوع انواع عرض الموضوع
  #1  
قديم 11-19-2010, 08:11 AM
RSS RSS غير متواجد حالياً

ViP

 
تاريخ التسجيل: Mar 2010
المشاركات: 24,930
معدل تقييم المستوى: 75
RSS has much to be proud ofRSS has much to be proud ofRSS has much to be proud ofRSS has much to be proud ofRSS has much to be proud ofRSS has much to be proud ofRSS has much to be proud ofRSS has much to be proud ofRSS has much to be proud ofRSS has much to be proud ofRSS has much to be proud of
افتراضي The most foolish economic policy move ever?

*The most foolish economic policy move ever?* * by Martin Hutchinson * November 15, 2010 As long-term U.S. interest rates rise and...

The most foolish economic policy move ever?

* by Martin Hutchinson
* November 15, 2010


As long-term U.S. interest rates rise and negative global reactions roll in to the Fed's Nov. 3 announcement of a further $600 billion round of "quantitative easing" purchases of Treasury bonds, to the inquiring mind one question becomes uppermost: Even though there's a huge amount of competition for this title, is it indeed possible that this Ben Bernanke masterstroke was the most foolish economic policy move ever?

Even a mere 10 days after its passage, and before significant implementation, it's clear that Bernanke's move, in terms of adverse effect compared to the size of the policy move, is well up there. The Fed's buying program will be concentrated on medium-term Treasury bonds, for two reasons. First, the Fed's loss of principal if interest rates rise will be less on those. Second, the Fed, when looking at the market's inflation expectations, looks at the five-year forward rate on five-year Treasury securities—thus buying five-year Treasurys maximizes its impact on its favorite inflation-expectations indicator.

The problem is that the market, being manned by traders and investors rather than academic economists, is more simple-minded. When determining its expectations on future inflation, the market looks at the yield on 30-year Treasurys, possibly comparing it with the yield on 30-year Treasury Inflation-Protected Securities (TIPS). So the Fed's Treasury bond-buying program, by raising yields on 30-year bonds (which were more or less excluded from it) increased both long-term yields (and hence home mortgage costs) and the market's expectations about inflation. The move was directly counterproductive, in other words.

It was also highly counterproductive indirectly. Within days of its announcement, the policy had been denounced by China, Brazil, Germany and various other countries, all of whom accused the U.S. of competitive dollar devaluation—with some reason. The gold price shot though $1,400 and is likely to continue rising as long as the policy is in effect. No less a panjandrum than Robert Zoellick, president of the World Bank, suggested that gold should be reintroduced to the international monetary system. For us long-term gold bugs, this was deeply gratifying, but I'm dang sure it's not what Bernanke intended.

The final verdict on QE2 will not be given until we have seen its long-term effects. Still, it seems likely that it will eventually rank among history's classic bungles, at least on the economic front.

The most famous economic policy errors are those that bore much of the responsibility for the Great Depression. However, on close examination, I'm not sure Bernanke doesn't have them beat, when you consider the information policymakers were working with. The Smoot-Hawley Tariff was certainly damaging, but it represented only a modest increase in duties over the already protective Fordney-McCumber tariff of 1922. The Fed's failure to print more money after banks started crashing in December 1930 was celebrated by Ben Bernanke himself, but at the time the solution to the nation's bank failure problem was not obvious—in that pre-Milton Friedman age the mechanics of money supply were poorly understood. Herbert Hoover's tax increase of 1932, raising the top rate of income tax from 25% to 63%, was perhaps the most stupid policy decision of the Great Depression. But the economy was already close to reaching bottom when it was implemented.

Outside the United States, there are some less debatable instances of foolish policy. British Chancellor of the Exchequer Roy Jenkins, always thought of by his acolytes as a moderate, imposed an income tax rate of 135% on high incomes in 1968. Needless to say, that was great for incentives, and yielded tons of revenue!

Then there's Mao Zedong's 1958-61 Great Leap Forward, under which private farming was forbidden and agriculture collectivized. That is estimated to have killed 100 million people, but its motivation was primarily political rather than economic. The same applies to the Soviet collectivization of 30 years earlier. The other notorious famine, the Irish potato famine of 1846-48, was however not political but the result (after the original potato blight) of economic experimentation, in that case the extreme Whig version of free trade. This held that feeding starving Irishmen destroyed their incentive to work—clearly ignoring the idea that a (temporarily) disincentivized peasantry might be preferable to a dead one. The non-Whigs Lord Liverpool 30 years earlier and Lord Salisbury at the India Office 30 years later avoided this economic fanaticism in dealing with famines.

Going further back, one has to include the French Regent Philippe d'Orleans, allowing John Law to take over the French currency in 1718 and giving him a monopoly of paper money issued from his fly-by-night Banque Royale. When the Banque Royale collapsed, unlike in the simultaneous South Sea Bubble crisis in England, the French merchant class had its savings wiped out, making government borrowing very difficult and expensive for the reminder of the century—and leading to the British victories in the Seven Years War and the French Revolution. In mitigation, one can say that the paper money experiment had only been tried on a large scale once before, in Song Dynasty China, where it had worked well until collapsing after the Mongol invasion. No doubt both the Regent and Law were regrettably ignorant of the Chinese experience of half a millennium before.

China gives us another example, this one from 1793, when it was still one of the world's richest countries, with over 30% of global Gross Domestic Product. The Emperor Qianlong (1736-95), in a letter to George III prompted by the visit of the British delegation under Lord Macartney, grandly opined: "Our Celestial Empire possesses all things in prolific abundance and lacks no product within its own borders. There is therefore no need to import the manufactures of outside barbarians in exchange for our own products."

It was close to the sentiment that motivated Reed Smoot and motivates today's protectionist trades union movement, but in the event it proved disastrous—China's share of world GDP declined to a low of about 4% in 1960. Qianlong's decision, condemning China to excluding the burgeoning Western machinery and manufactures, was not the only factor in that decline but was key to it.

Finally, to the example of poor economic decision-making that most resembles Ben Bernanke in action, that of 17th century Easter Island. From 1000-1600, the inhabitants of that then-well-forested island had developed a high-level civilization, its religious rituals involving the erection of immense stone moai statues, towed into place on cylindrical tree-trunks. When forestation began to decline, the Easter Islanders seem to have decided that the solution was to erect more moai, devastating the rest of the forests to do so. Needless to say, this was economically a highly foolish decision, causing the island's relatively sophisticated civilization to collapse. For the next 200 years, the starving remnants of the islanders, doubtless cursing the folly of their ancestors, occupied themselves in pulling down moai one after another, until by the time European colonists took over in 1868 few were left standing.

The Bernanke analogy here is startling. The moai are of course the big banks, which Bernanke believes himself bound to preserve. To establish and nurture big banks requires capital, abundant in the United States until the late 1990s. However, low interest rates, allowing the exponential growth of the moai/banks and their increasing dominance of the U.S. economy, also have the effect of decapitalizing the U.S. economy by suppressing its savings rate and causing repeated capital destruction in crashes. The result of the capital stock thus removed, having been necessary for survival both of the moai/banks and of society as a whole, can only be collapse, this time economic rather than ecological. Bernanke's second quantitative easing represents the point at which the Easter Islanders realized they had a real problem with deforestation, but decided to redouble their production of moai instead of preserving trees.

At present, therefore, Bernanke's QE2 policy occupies a leading position in the history of foolish economic decisions, but is not yet at the summit. Should its damage prove only moderate, then Hoover's income tax increases, the Great Leap Forward and Qianlong's protectionism are all clearly greater follies, although Bernanke has already moved ahead of Reed Smoot, the 1930-32 Fed, Roy Jenkins and John Law.

There is however a modest probability that Bernanke's policies will prove to have been the equivalent of Easter Island's moai obsession, with QE2 being the final stage, ending in decapitalization of the U.S. economy, impoverishment of its people, and a miserable couple of centuries for their descendents tearing down bank buildings. In that case, since the United States is bigger than Easter Island, Bernanke would clearly have proved himself the champion of economic folly.

The Bear's Lair is a weekly column that is intended to appear each Monday, an appropriately gloomy day of the week. Its rationale is that the proportion of "sell" recommendations put out by Wall Street houses remains far below that of "buy" recommendations. Accordingly, investors have an excess of positive information and very little negative information. The column thus takes the ursine view of life and the market, in the hope that it may be usefully different from what investors see elsewhere.

Martin Hutchinson is the author of Great Conservatives (Academica Press, 2005)—details can be found on the Web site www.greatconservatives.com --and co-author with Professor Kevin Dowd of Alchemists of Loss (Wiley – 2010). Both now available on Amazon.com, Great Conservatives only in a Kindle edition, Alchemists of Loss in both Kindle and print editions.

http://prudentbear.com/index.php/the...w?art_id=10468


*The most foolish economic policy move ever?* * by Martin Hutchinson * November 15, 2010 As long-term U.S. interest rates rise and negative global reactions roll in to the Fed's Nov. 3 announcement of a further $600 billion round of "quantitative easing" purchases of Treasury...
الموضوع الأصلى من هنا: منتديات القرصان http://www.alkrsan.net/forum/caoun-ae-caounca-poetry-and-poets/31766-the-most-foolish-economic-policy-move-ever.html

The most foolish economic policy move ever?
Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!
رد مع اقتباس
إضافة رد

العلامات المرجعية


يتصفح الموضوع حالياً : 1 (0 عضو و 1 ضيف)
 
أدوات الموضوع
انواع عرض الموضوع

ضوابط المشاركة
لا تستطيع إضافة مواضيع جديدة
لا تستطيع الرد على المواضيع
لا يمكنك اضافة مرفقات
لا يمكنك تعديل مشاركاتك

BB code متاحة
كود [IMG] متاحة
كود HTML معطلة
Trackbacks are معطلة
Pingbacks are معطلة
Refbacks are معطلة



جميع الأوقات بتوقيت GMT +3. الساعة الآن 12:50 PM.


Powered by vBulletin® Version 3.8.5
Copyright ©2000 - 2020, Jelsoft Enterprises Ltd.
Content Relevant URLs by vBSEO 3.5.1 PL1

تعريب » القرصان - خدمات الويب

جميع الحقوق محفوظة alkrsan 2006-2014


1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 133 134 135 136 137 138 139 140 141 142 143 144 145 146 147 148 149 150 151 152 153 154 155 156 157 158 159 160 161 162 163 164 165 166 167 168 169 170 171 172 173 174 175 176 177 178 179 180 181 182 183 184 185 186 187 188 189 190 191 192 193 194 195 196 197 198 199 200 201 202 203 204 205 206 207 208 209 210 211 212 213 214 215 216 217 218 219 220 221 222 223 224 225 226 227 228 229 230 231 232 233 234 235 236 237 238 239 240 241 242 243 244 245 246 247 248 249 250 251 252 253 254 255 256 257 258 259 260 261 262 263 264 265 266 267 268 269 270 271 272 273 274 275 276 277 278 279 280 281 282 283 284 285 286 287 288 289 290 291 292 293 294 295 296 297 298 299 300 301 302 303 304 305 306 307 308 309 310 311 312 313 314 315 316 317 318 319 320 321 322 323 324 325 326 327 328 329 330 331 332 333 334 335 336 337 338 339 340 341 342 343 344 345 346 347 348 349 350 351 352 353 354 355 356 357 358 359 360 361 362 363 364 365 366 367 368 369 370 371 372 373 374 375 376 377 378 379 380 381 382 383 384 385 386 387 388 389 390 391 392 393 394 395 396 397 398 399 400 401 402 403 404 405 406 407 408 409 410 411 412 413 414 415 416 417 418 419 420 421 422 423 424 425 426 427 428 429 430 431 432 433 434 435 436 437 438 439 440 441 442 443 444 445 446 447 448 449 450 451 452 453 454 455 456 457 458 459 460 461 462 463 464 465 466 467 468 469 470 471 472 473 474 475 476 477 478 479 480 481 482 483 484 485 486 487 488 489 490 491 492 493 494 495 496 497 498 499 500 501 502 503 504 505 506 507 508 509 510 511 512 513 514 515 516