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It's always amazing to me that people continue to think they can cover up a failing economy by insisting everything is fine. For hundreds of years people have t

It's always amazing to me that people continue to think they can cover up a failing economy by insisting everything is fine. For hundreds of years people have tried this. In the end it never succeeds. Money goes where it wants and eventually it eats your lunch and your cake.

gaius 13y ago
Eventually might be a long time. How long have the Kim dynasty held power in North Korea? Or Castro in Cuba? Britain fought a war to free Argentina from Fascist dictatorship (and, err, get our islands back), they had a chance for a clean slate then, and they blew it.
- deleted 13y ago
  [deleted]
- ezequiel-garzon 13y ago
  "Britain fought a war to free Argentina from Fascist dictatorship (and, err, get our islands back)" Your parentheses make me hope your main statement is sarcastic. For the record, the dictatorship was already declining in popularity when it decided to take a bold gamble against the British Empire. Sadly, human nature shows that victory would have granted the regime additional years, if not decades, in power.
  - gaius 13y ago
    The rhetoric coming out of Argentina of late suggests that history is repeating.
  - danmaz74 13y ago
    And as a matter of fact, it was Argentina that fought a war to keep the Fascist dictatorship in power... not the other way around.
  - mistakoala 13y ago
    'Bold' should never be used synonymously for 'stupid' or 'reckless'.
    - deleted 13y ago
      [deleted]
    - ezequiel-garzon 13y ago
      They are all different concepts, but not mutually exclusive. I used "bold" since I feel the regime believed there was some positive probability of winning that war. Although I have no respect for the regime or the war they came up with, I feel "stupid" is the term that applies the least of all three.
  - slgeorge 13y ago
    And, in the UK it had the impact of ensuring that the conservative government led by Thatcher won at least another election. Before the war it wasn't looking that good, but due to the patriotic pay-off from the conflict her popularity numbers shot up. So there you go, as long as you 'win' a war it's beneficial to your election chances. We're all tribal underneath!
tsotha 13y ago
>In the end it never succeeds. Yeah, but the first part of that sentence, "In the end", is the key. Delaying the collapse gives the current office holders time to finish out their terms and it gives people with money time to move it offshore.
rz2k 13y ago
However, sentiment is vital to understanding economic conditions and what the effect of current 'fundamentals' will be. To understand the dynamic in a primitive economic sense, imagine that you can either farm and produce an excess of food to store away, or you can learn a specialized skill. In one scenario, you were too optimistic, and there will turn out to be no demand for your specialized skill. In another one, you can sell your excess food to other people in return for their skilled services. (Or maybe you're the one selling your services) And in yet another scenario, everyone has tried to save up wealth in the form of food, and extra food ends up being relatively worthless relative to other goods and services they need to buy for a high quality of life. When there is poor confidence about the future of the economy, people will tend to save rather than invest in the future. While, on an individual level it makes sense to store up safe assets, for an entire economy pessimism and poor sentiment can be self-fulfilling. Furthermore, those stores of wealth whether grain, currency or diamonds only maintain value as long as people are confident that they can be traded for other goods and services they need—something that becomes an increasing challenge when those goods and services simply aren't being produced in sufficient quantity. So, while you can't lie your way out of problematic fundamentals, underinvestment due to uncertainty is also an impediment that must be overcome, regardless of whether it is created by gloom about the prospects for the economy as a whole, or fear that markets will collapse, or fear of political upheaval where your potential gains will be confiscated.

gaius 13y ago

Eventually might be a long time. How long have the Kim dynasty held power in North Korea? Or Castro in Cuba? Britain fought a war to free Argentina from Fascist dictatorship (and, err, get our islands back), they had a chance for a clean slate then, and they blew it.

deleted 13y ago
[deleted]
ezequiel-garzon 13y ago
"Britain fought a war to free Argentina from Fascist dictatorship (and, err, get our islands back)" Your parentheses make me hope your main statement is sarcastic. For the record, the dictatorship was already declining in popularity when it decided to take a bold gamble against the British Empire. Sadly, human nature shows that victory would have granted the regime additional years, if not decades, in power.
- gaius 13y ago
  The rhetoric coming out of Argentina of late suggests that history is repeating.
- danmaz74 13y ago
  And as a matter of fact, it was Argentina that fought a war to keep the Fascist dictatorship in power... not the other way around.
- mistakoala 13y ago
  'Bold' should never be used synonymously for 'stupid' or 'reckless'.
  - deleted 13y ago
    [deleted]
  - ezequiel-garzon 13y ago
    They are all different concepts, but not mutually exclusive. I used "bold" since I feel the regime believed there was some positive probability of winning that war. Although I have no respect for the regime or the war they came up with, I feel "stupid" is the term that applies the least of all three.
- slgeorge 13y ago
  And, in the UK it had the impact of ensuring that the conservative government led by Thatcher won at least another election. Before the war it wasn't looking that good, but due to the patriotic pay-off from the conflict her popularity numbers shot up. So there you go, as long as you 'win' a war it's beneficial to your election chances. We're all tribal underneath!

tsotha 13y ago

>In the end it never succeeds. Yeah, but the first part of that sentence, "In the end", is the key. Delaying the collapse gives the current office holders time to finish out their terms and it gives people with money time to move it offshore.

rz2k 13y ago

However, sentiment is vital to understanding economic conditions and what the effect of current 'fundamentals' will be. To understand the dynamic in a primitive economic sense, imagine that you can either farm and produce an excess of food to store away, or you can learn a specialized skill. In one scenario, you were too optimistic, and there will turn out to be no demand for your specialized skill. In another one, you can sell your excess food to other people in return for their skilled services. (Or maybe you're the one selling your services) And in yet another scenario, everyone has tried to save up wealth in the form of food, and extra food ends up being relatively worthless relative to other goods and services they need to buy for a high quality of life. When there is poor confidence about the future of the economy, people will tend to save rather than invest in the future. While, on an individual level it makes sense to store up safe assets, for an entire economy pessimism and poor sentiment can be self-fulfilling. Furthermore, those stores of wealth whether grain, currency or diamonds only maintain value as long as people are confident that they can be traded for other goods and services they need—something that becomes an increasing challenge when those goods and services simply aren't being produced in sufficient quantity. So, while you can't lie your way out of problematic fundamentals, underinvestment due to uncertainty is also an impediment that must be overcome, regardless of whether it is created by gloom about the prospects for the economy as a whole, or fear that markets will collapse, or fear of political upheaval where your potential gains will be confiscated.