4 ms·

it is common to say that intervention from governments and central banks "distort" money and makes it impossible for investors to get accurate information from

• djbusby 4y ago
  It's popular because "government bad" and "capitalism good". Of course that blanket logic is false however, it's widely believed, it sells and gets propagated.
• SilverBirch 4y ago
  Core to almost all economic study is a set of simplifying assumptions that make models of the world so that from those models we can then make predictions. The problem is that economists lose sight of this. When the government intervenes in the economy it makes the economy not look like economists model of the economy. So they claim the government is distorting the economy, but in reality that's rubbish. The government is an actor in the economy, one that economists are bad at modelling, and even if they were good at modelling it, there's no normative reason why the world should behave like their model. It's a wildly right wing view of the world that has been subtly smuggled into the core of economists view of the world.
  • confidantlake 4y ago
    I agree and would even go further. Economics as a whole is basically a right wing social science. Most models bear little resemblance to real life and offer virtually no predictive power. It is an entirely unserious field.
    • andrekandre 4y ago
      > Economics as a whole is basically a right wing social science. im not sure i would got that far, but its definitely has a strong neo-liberal bent for some time i'd say theres a reason they used to call it 'political economy' instead of just 'economics'...
      • SilverBirch 4y ago
        Neoliberal economics is basically "WE GET RICHER ON AVERAGE and maybe at some point possibly we should compensate those people we fucked over"
• jesuscript 4y ago
  behind nebulous contracts or ridiculously overvaluating companies Just as a thought experiment, try to restate that with the poker analogy. 1. behind nebulous contracts A bluff. You are bidding up a hand so people believe it’s a good hand. 2. ridiculously overvaluating companies Bidding up a hand because you know the other side can’t afford the risk (they can’t match you when you up the ante, doesn’t matter how good their hand, modest institutions won’t take the risk), so you can take the pot just economically. Overvaluing a company is to make the sale look attractive to investors (it’s 50bn, must be worth a shit right). Once you have them, your job is done, take the pot, drop the value. A retirement fund can’t stand up to “we need crypto exposure in our portfolio”, they’ll fold and take it. ——— The point is, the economy has this psychological element. What most people are not ready to hear is that in this game, the psychological games leaves any side either fleeced, caught, exposed, or downright unlucky. That’s why it’s unnerving, because our economy is supposed to be numbers in, numbers out. But it’s not. It’s not the money that’s the problem, it’s the psychological game. ———- Government debt printing is the most optimistic psychological game we have in the economy. It’s a bet on the future potential of the country. It’s a risk, the country may not be what we think it’s capable of in the future. But it’s far less insidious than the other psycho tricks.
  • junofan 4y ago
    > Government debt printing is the most optimistic psychological game we have in the economy. Print too much and the big money poker game (capital formation) moves elsewhere.
    • jesuscript 4y ago
      What casino fears that? Where you gonna play, China?
• unity1001 4y ago
  > but is it a faux-pas to talk about banks and stock markets distorting the value of money by hiding unsecured debt behind nebulous contracts or ridiculously overvaluating companies? Through immense propaganda and conditioning of the public by the publications of those very financial organizations, of course. Private entities can do it to maximize their profit at the expense of everyone else. Everyone else cant do it to maximize the benefit of everyone. Its socialism for the rich. capitalism for the poor like always.
• hammock 4y ago
  Banks and stock markets don’t pilfer my wallet at the point of a gun under the guise of protecting my freedom
  • arrosenberg 4y ago
    Sure, the banks will protect your freedom with a 5/1 adjustable mortgage and then kick you out in year 6 when the interest spikes. Those lovable banks!
    • ThunderSizzle 4y ago
      Who the hell is getting an ARM? Most mortgages, at least in the States, are fixed rates. Also, mortgages are almost entirely regulated. There's almost nothing a business can do in the mortgage sphere that wasn't specifically allowed by the feds.
      • simiones 4y ago
        Yes, the point is that the banks are (edit: should have said "would be, in the absence of government regulation") far more predatory than government - it's in fact government (who GP claimed is "sticking them at gunpoint") that is protecting us from the banks. Just look at loan sharks for a view of what banks sans regulation are.
      • arrosenberg 4y ago
        Thats cute, but I lived through the 2008 housing crash, none of that stuff stopped the banks from kicking people out of their homes and destroying a bunch of lives.
        • guhidalg 4y ago
          Your bank isn't a good bank, their bank is obviously a virtuous bank that would never prey on desperate borrowers /s
        • ThunderSizzle 4y ago
• pmichaud 4y ago
  Is it a faux pas? I hear this sort of thing constantly, eg. your post?
• sebastianconcpt 4y ago
  Because the market will correct itself. Government never do that (unless there is a civil war or revolution).
  • lovich 4y ago
    Governments have corrected themselves numerous times without revolution, unless you are counting democratic regime changes as a revolution.
    • sebastianconcpt 4y ago
      Oh boy what do I have to listen to... you're talking to an argentinean. Yeah, from an insanely rich land in steady and perfectly predictable decadence for more about 100 years by now. And straight from the top of the world. No, goverments never shrink themselves. The political class only vote for power growth over the population. There is no correction to that unless there is a popular revolt that takes them out.
      • lovich 4y ago
        I don’t believe that shrinking themselves is required for a correction and even to that extent the governments in the west at least have shrunk themselves several times by removing or reducing regulatory agencies
        • sebastianconcpt 4y ago
          You are basically agreeing with what I've said then. Political class power expansion is always growing. A little regulation removal, a little pullback, doesn't make them not to stay power growth bullish. If you see that rule isn't fair to what is generally happening countries, please prove me wrong, show me in history in what countries the political class went bear on power growth without a revolt or revolution. Again, not a little pullback, but a bearish correction. What are the chances of the political class individuals current psychology suddenly make them agree, collectively enough, to say "hey, let's make ourselves this amount of less powerful for the benefit of the people"? It simply doesn't happen because before even trying, their propaganda collapses so bad that people revolts on the realization of the lies and revolt and replace their political class or even system. The left is a master at this by the way, that's why a good limiting constitution might be the last source of hope.