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That's a pretty sanguine take. I'm not so sure that it will end well at all. I think we're still in the winter of the 2008 crisis but now we've burned all of

That's a pretty sanguine take. I'm not so sure that it will end well at all. I think we're still in the winter of the 2008 crisis but now we've burned all of our firewood. But it's worse than that, actually, because we've exacerbated the situation. The low rates have ballooned debt and any correction means defaults start to cascade, creating a domino effect of credit defaults. If that happens it will be quickly followed by a liquidity crunch; no one will have cash/precious metals. I'm a little bit furious that the central banks have been experimenting like a doctor from the 19th century with our collective economic health. We're being "bled out" to save us from the common cold with potentially disastrous consequences.

omginternets 6y ago
>We're being "bled out" to save us from the common cold with potentially disastrous consequences. I'm convinced this is a direct consequence of the "management politics" that have become the norm. The winning strategy in politics is not to present meaningful socio-political projects, which carry risk and can cost elections, but instead to let the invisible hand set the course, and content oneself with avoiding immediate obstacles. A consequence of this is that politicians actively reduce their authority, when it suits them. In the case of a global pandemic, this takes the form of deferring to science or medicine; the lockdown wasn't "their idea", it was the medical profession's! The telos of the politician is -- in the strictest sense of the term -- tragic. It is his job to make hard judgement calls between equally important, but opposing values. In war, politicians send thousands of young men to their deaths, and in the best possible case, this is done in service of another ideal, such as the survival of the nation. Yet with respect to the pandemic, the political class has abandoned its duty to to grapple with these moral issues, and has instead left the decision to the medical class, whose telos makes the resulting policy a foregone conclusion; The medical profession's function is to reduce risk (at all costs!), not arbitrate values. The result is that we are now maximizing "life" in the lowest biological sense, even if it means sacrificing the basis for thriving. History will look at this as one of the biggest blind-spots of 21st century society. I am convinced of it.
- iujjkfjdkkdkf 6y ago
  Yes! I've made a similar observation that politicians have abdicated their responsibility for decision making in many policy matters. And that good politicians are really all that keeps us from some sort of creepy technocracy where we are forced to behave "for our own good" based on someone else's narrow version of what our own good it. There was even a Simpsons episode about it, where the nerds took over the city leadership (also a similarly themed fresh price I believe where Carleton ran the school cafeteria). Covid is the most obvious ongoing example but I think the thread is there through how all kinds of new technology is managed, from ride sharing, crypto, etc, to digital records and data collection. The economy is another great example I never really thought about. Unfortunately, nothing will change in my view until we have a decent batch of politicians come along that are both principled to want to do something beyond just pandering to whoever is loudest, and charismatic enough to build the consensus that is needed for tough change. I suspect this will have to wait until a real serious crisis comes along that galvanized people into putting the usual retail political aside.
  - omginternets 6y ago
    >we have a decent batch of politicians come along that are both principled to want to do something beyond just pandering to whoever is loudest I think this in turn can only happen if we abandon the idea that markets should be the main mechanism by which we regulate society (and by extension, politics). This kind of collective (ideally sensible) risk-taking requires a debate centered on shared values, rather than just material outcomes. On another note, it is really nice to see that I'm not alone in having these thoughts. Thank you for your comment. :)
  - mattmanser 6y ago
    On the other hand the reason why so many modern economies have "outsourced" the decision making on central banking is because when it was up to them, they'd pull the short-term gain, long-term collapse lever too often.
    - omginternets 6y ago
ivalm 6y ago
But why would there be liquidity crunch? March 2020 showed us QE to fund a credit backstop works wonders. Maybe inflation is the way things go south but definitely not a credit crunch.
- david927 6y ago
  Because magic doesn't exist. It's not the first time humans have ever thought, "Why I'll just manage my debt by inflating my currency!" Look at Germany in the 30's. You can say that wasn't a liquidity crunch but it was in terms of non-currency liquid assets, such precious metals.
  - ivalm 6y ago
    Notice how we no longer back currency with metals. Again, hyperinflation does exist, and I did mention in my reply, liquidity crunch does not exist given current policy.
    - david927 6y ago
      I see what you're saying. Personally, I think that hyperinflation would mean a fire sale on assets for gold and silver -- and that's a really good way to describe a liquidity crunch. But I concede the point.
      - onlyrealcuzzo 6y ago
        Are gold and silver not assets? Why would everyone suddenly not want all the other assets and only want gold and silver?
        david927 6y ago
        They're fungible assets which are incredibly liquid and easy to transport. Historically, that's money.
  - throw0101a 6y ago

omginternets 6y ago

>We're being "bled out" to save us from the common cold with potentially disastrous consequences. I'm convinced this is a direct consequence of the "management politics" that have become the norm. The winning strategy in politics is not to present meaningful socio-political projects, which carry risk and can cost elections, but instead to let the invisible hand set the course, and content oneself with avoiding immediate obstacles. A consequence of this is that politicians actively reduce their authority, when it suits them. In the case of a global pandemic, this takes the form of deferring to science or medicine; the lockdown wasn't "their idea", it was the medical profession's! The telos of the politician is -- in the strictest sense of the term -- tragic. It is his job to make hard judgement calls between equally important, but opposing values. In war, politicians send thousands of young men to their deaths, and in the best possible case, this is done in service of another ideal, such as the survival of the nation. Yet with respect to the pandemic, the political class has abandoned its duty to to grapple with these moral issues, and has instead left the decision to the medical class, whose telos makes the resulting policy a foregone conclusion; The medical profession's function is to reduce risk (at all costs!), not arbitrate values. The result is that we are now maximizing "life" in the lowest biological sense, even if it means sacrificing the basis for thriving. History will look at this as one of the biggest blind-spots of 21st century society. I am convinced of it.

iujjkfjdkkdkf 6y ago
Yes! I've made a similar observation that politicians have abdicated their responsibility for decision making in many policy matters. And that good politicians are really all that keeps us from some sort of creepy technocracy where we are forced to behave "for our own good" based on someone else's narrow version of what our own good it. There was even a Simpsons episode about it, where the nerds took over the city leadership (also a similarly themed fresh price I believe where Carleton ran the school cafeteria). Covid is the most obvious ongoing example but I think the thread is there through how all kinds of new technology is managed, from ride sharing, crypto, etc, to digital records and data collection. The economy is another great example I never really thought about. Unfortunately, nothing will change in my view until we have a decent batch of politicians come along that are both principled to want to do something beyond just pandering to whoever is loudest, and charismatic enough to build the consensus that is needed for tough change. I suspect this will have to wait until a real serious crisis comes along that galvanized people into putting the usual retail political aside.
- omginternets 6y ago
  >we have a decent batch of politicians come along that are both principled to want to do something beyond just pandering to whoever is loudest I think this in turn can only happen if we abandon the idea that markets should be the main mechanism by which we regulate society (and by extension, politics). This kind of collective (ideally sensible) risk-taking requires a debate centered on shared values, rather than just material outcomes. On another note, it is really nice to see that I'm not alone in having these thoughts. Thank you for your comment. :)
- mattmanser 6y ago
  On the other hand the reason why so many modern economies have "outsourced" the decision making on central banking is because when it was up to them, they'd pull the short-term gain, long-term collapse lever too often.
  - omginternets 6y ago

ivalm 6y ago

But why would there be liquidity crunch? March 2020 showed us QE to fund a credit backstop works wonders. Maybe inflation is the way things go south but definitely not a credit crunch.

david927 6y ago
Because magic doesn't exist. It's not the first time humans have ever thought, "Why I'll just manage my debt by inflating my currency!" Look at Germany in the 30's. You can say that wasn't a liquidity crunch but it was in terms of non-currency liquid assets, such precious metals.
- ivalm 6y ago
  Notice how we no longer back currency with metals. Again, hyperinflation does exist, and I did mention in my reply, liquidity crunch does not exist given current policy.
  - david927 6y ago
    I see what you're saying. Personally, I think that hyperinflation would mean a fire sale on assets for gold and silver -- and that's a really good way to describe a liquidity crunch. But I concede the point.
    - onlyrealcuzzo 6y ago
      Are gold and silver not assets? Why would everyone suddenly not want all the other assets and only want gold and silver?
      - david927 6y ago
        They're fungible assets which are incredibly liquid and easy to transport. Historically, that's money.
- throw0101a 6y ago