The European communist heritage triumphed again (Vincent De Roeck)
In June 2007, the British newspaper Daily Telegraph already warned for an upcoming financial crisis due to mortgage and real estate problems in the United States.
To me, there are only two kinds of economists - those who believe in the market economy, and those who do not. You simply can’t bargain on the free market, not in monetary matters, not in financial transactions, not in all other sorts of trade, interaction, commerce and exchange. So to me, the position of the European Central Bank is crystal clear. By trying to “stabilize” markets through the mass injection of money, the ECB board acknowledged that they simply do not believe in the free market.
But this is not a big surprise to me at all. The ECB is not only a state-run institution, it is also headed by some Jean-Claude Trichet, a statist Frenchman of the worst possible absolutist tradition, who is very eager to please the governments that appointed him, in spite of him back then being accused of corruption and bank fraud. In no single other country on the face of the Earth, a corrupt bureaucrat like Mr. Trichet would have had the slightest chance to become head of a National Bank, but this is the European Union we are talking about. This is the antithesis of transparent and intelligent government. The EU currently embodies everything Europeans ever fought or rebelled against - corruption, cleptocracy, misgovernment, bureaucracy, unaccountability, and yes, even tyranny.
The biggest threat to free markets is the interventionist policy of the European Central Bank. In two days time, they have injected over 150 billion Euros (approximately 205 billion U.S. Dollars) in financial markets throughout Europe. This is not only a disgrace for all those who believe in the free market, but also for everyone who adheres to the basic principles of the Western financial model. Either we believe in the market economy and its inherent capability of resolving to this problem, either we believe in the State’s birthright and its bureaucratic solutions to the credit crunch. The choice we had to make was hence very simple and very traditional. Either we chose for freedom and self-regulation, either we chose for totalitarian state intervention. Once again, the European communist heritage triumphed over the common sense of liberalism.
In the worst case scenario, the ECB injections might further disturb the market and cause even more inflation than it is already causing on an everyday basis just by having the monopoly on the printing of paper backed money. According to Dr. Richard Rahn, chairman of the Center for Global Economic Growth, inflation is inexistent in a real free market economy. The United States, for example, never had inflation of any kind in the hundred year period following the Declaration of Independence, since every bank itself was allowed to print Dollar bills for as long as they could back it with gold or silver themselves. Central banks, like the ECB and the Federal Reserve, were created by governments who erroneously believed that they were better placed to control the issued money than private actors were. They got it wrong back then, and they still get it wrong today. Central banks cause all the inflation due to their monopoly position and the lack of competition. Central banks do not resolve crises. In fact, they cause them.
In the best possible scenario, the ECB money will alter the negative developments on the financial market, but this is only a relative success on the (very) short term, since the real problems - the American real estate and mortgage crises - are in no way affected by this ECB measure. On the middle and long term, the ECB money will not have been sufficient enough to tranquilize the markets for ever. On the long term, the situation will be as bad as it was before, and the European taxpayers will have lost as much as 150 billion Euros of their tax money reserves, just by a decision made by overpaid bureaucrats in a far-away overpriced skyscraper. The ECB bureaucrats are in fact just gambling with the taxpayers’ money and, what really shocks me, they are in no way accountable or responsible for this waste of our money.
Markets are meant to fluctuate and equilibriums are meant to change in a perpetual manner. This government intervention is destroying the very process of market economy by subsidizing the errors and bad investments made by the European banks and financial institutions. This is Colbertism of the very highest scale. And why? Not to "help" the consumers, but simply to "support" the banks. The government is transferring the European money reserves from the ECB to the national treasuries. The "supported" banks are able to continue making profit, and hence to pay more taxes to their national governments. Indirectly, these banks are returning ECB money to the national budget. And this again will undoubtedly lead to further monetary instability and more inflation.
This situation reminds me of the magical words spoken by the liberal French merchant Legendre on a meeting of entrepreneurs in response to the question “What more can the State do for you?” asked by Colbert, advisor to the French absolutist monarch and founder of Colbertism, the statist economy named after him. Legendre replied to this “Laissez-nous faire!”. The concept of stateless economy was born. The most important doctrine in economics ever was launched.
So, in brief, the best way the ECB could have dealt with this problem, was to not have done anything.
Meer over economisch libertarisme op www.lvmi-europe.org.
Meer teksten van Vincent De Roeck op www.libertarian.be.
The United States faces a severe credit crunch as mounting losses on risky forms of debt catch up with the banks and force them to curb lending and call in existing loans.As usual, the indulged Europeans did not respond to this warning in the appropriate way. Immobility has always been the main characteristic of European financial policy and very often, ironically, this attitude proved to be right afterwards. So might have happened as well this time, if we would not have had a bunch of government appointees controlling the ECB board in Frankfort. Today, only two months after the article in the Daily Telegraph, European banks suffer from the announced explosion of the housing bubble and the credit crunch in the United States and stock brokers all around Europe are panicking. The stock markets are going down, and down, and down.
To me, there are only two kinds of economists - those who believe in the market economy, and those who do not. You simply can’t bargain on the free market, not in monetary matters, not in financial transactions, not in all other sorts of trade, interaction, commerce and exchange. So to me, the position of the European Central Bank is crystal clear. By trying to “stabilize” markets through the mass injection of money, the ECB board acknowledged that they simply do not believe in the free market.
But this is not a big surprise to me at all. The ECB is not only a state-run institution, it is also headed by some Jean-Claude Trichet, a statist Frenchman of the worst possible absolutist tradition, who is very eager to please the governments that appointed him, in spite of him back then being accused of corruption and bank fraud. In no single other country on the face of the Earth, a corrupt bureaucrat like Mr. Trichet would have had the slightest chance to become head of a National Bank, but this is the European Union we are talking about. This is the antithesis of transparent and intelligent government. The EU currently embodies everything Europeans ever fought or rebelled against - corruption, cleptocracy, misgovernment, bureaucracy, unaccountability, and yes, even tyranny.
The biggest threat to free markets is the interventionist policy of the European Central Bank. In two days time, they have injected over 150 billion Euros (approximately 205 billion U.S. Dollars) in financial markets throughout Europe. This is not only a disgrace for all those who believe in the free market, but also for everyone who adheres to the basic principles of the Western financial model. Either we believe in the market economy and its inherent capability of resolving to this problem, either we believe in the State’s birthright and its bureaucratic solutions to the credit crunch. The choice we had to make was hence very simple and very traditional. Either we chose for freedom and self-regulation, either we chose for totalitarian state intervention. Once again, the European communist heritage triumphed over the common sense of liberalism.
In the worst case scenario, the ECB injections might further disturb the market and cause even more inflation than it is already causing on an everyday basis just by having the monopoly on the printing of paper backed money. According to Dr. Richard Rahn, chairman of the Center for Global Economic Growth, inflation is inexistent in a real free market economy. The United States, for example, never had inflation of any kind in the hundred year period following the Declaration of Independence, since every bank itself was allowed to print Dollar bills for as long as they could back it with gold or silver themselves. Central banks, like the ECB and the Federal Reserve, were created by governments who erroneously believed that they were better placed to control the issued money than private actors were. They got it wrong back then, and they still get it wrong today. Central banks cause all the inflation due to their monopoly position and the lack of competition. Central banks do not resolve crises. In fact, they cause them.
In the best possible scenario, the ECB money will alter the negative developments on the financial market, but this is only a relative success on the (very) short term, since the real problems - the American real estate and mortgage crises - are in no way affected by this ECB measure. On the middle and long term, the ECB money will not have been sufficient enough to tranquilize the markets for ever. On the long term, the situation will be as bad as it was before, and the European taxpayers will have lost as much as 150 billion Euros of their tax money reserves, just by a decision made by overpaid bureaucrats in a far-away overpriced skyscraper. The ECB bureaucrats are in fact just gambling with the taxpayers’ money and, what really shocks me, they are in no way accountable or responsible for this waste of our money.
Markets are meant to fluctuate and equilibriums are meant to change in a perpetual manner. This government intervention is destroying the very process of market economy by subsidizing the errors and bad investments made by the European banks and financial institutions. This is Colbertism of the very highest scale. And why? Not to "help" the consumers, but simply to "support" the banks. The government is transferring the European money reserves from the ECB to the national treasuries. The "supported" banks are able to continue making profit, and hence to pay more taxes to their national governments. Indirectly, these banks are returning ECB money to the national budget. And this again will undoubtedly lead to further monetary instability and more inflation.
This situation reminds me of the magical words spoken by the liberal French merchant Legendre on a meeting of entrepreneurs in response to the question “What more can the State do for you?” asked by Colbert, advisor to the French absolutist monarch and founder of Colbertism, the statist economy named after him. Legendre replied to this “Laissez-nous faire!”. The concept of stateless economy was born. The most important doctrine in economics ever was launched.
So, in brief, the best way the ECB could have dealt with this problem, was to not have done anything.
Meer over economisch libertarisme op www.lvmi-europe.org.
Meer teksten van Vincent De Roeck op www.libertarian.be.
posted by Vincent De Roeck @ 05:43
5 comments
5 Comments:
Het hoofddoel van de ECB is nog altijd het beheersen van de inflatie. Enerzijds mag men dus niet al te veel flexibiliteit op vlak van de rente verwachten, maar anderzijds moet je zulke interventies leren aanvaarden. De ECB vermindert op deze wijze immers de enorme impact van deze crisis. Natuurlijk is dit enkel maar nuttig op de korte termijn, maar als de banken één voor één de boeken sluiten omdat ze financieel aan de grond zitten, is er van een lange termijn zelfs helemaal geen sprake meer. Vandaag is er nood aan een snelle oplossing. Morgen zullen we wel zien of er neveneffecten zijn, en overmorgen zullen we de veroorzaakte problemen wel opnieuw het hoofd bieden. De markt faalt nooit op de lange termijn, maar wanneer er mensen in betrokken zijn, kan men de maatregelen niet zomaar uitstellen. De mens en het genot van de mens moet nog steeds centraal staan, niet één of ander abstract lange-termijn economisch model. Bovendien zijn je beschuldigingen zwaar overdreven. De ECB is immers een onafhankelijk orgaan dat niet beïnvloed wordt door nationale regeringen.
Bert, er schort wel iets aan uw feitenkennis. De EU heeft wel degelijk iets te maken met de ECB. Trichet en consorten werden wel aangesteld door de overheden en zijn bijgevolg nog steeds aan hen schatplichtig. De overheden controleren wel degelijk de werking van de ECB.
Je hebt natuurlijk wel een punt in je beginstelling. Ik heb steeds geleerd dat er twee aanpakken waren in de economie, namelijk de “monetaristische” aanpak van “laissez-faire” en de “Keynesiaanse” aanpak van staatsinterventie. Als libertariër ben ik ook eerder te vinden voor het eerste model, maar in de praktijk is dat model meestal niet werkbaar. Bert Debacker heeft gelijk. Op de lange termijn kan de markt nooit falen, maar op de korte termijn heeft de samenleving andere noden en andere katten te geselen. Zo legitimeert men staatsinterventie in tijden van crisis, om de impact op de levenskwaliteit van de burgers te minimaliseren.
Stel je voor dat er een beurskrach plaatsvindt zoals in 1929 en plots eizona alle mensen hun spaargeld en job kwijtgeraken. De monetaristen stellen voor om niets te doen. De economie zal zichzelf inderdaad wel redden, maar dat zal gebeuren over een periode van laat ons zeggen 10 à 15 jaar. Tegen 1944 is alles dan terug zoals tevoren. De aanpak heeft theoretisch gewerkt. Maar waarvan hebben alle mensen gedurende die 15 jaren moeten leven? Zij hadden de luxe niet om te kunnen afwachten op de werking van de “onzichtbare hand”. Dan is de andere aanpak veel meer lonend. Misschien is de economie in 1944 minder gezond dan hij met de eerste aanpak geweest had kunnen zijn, maar de mensen hebben de 15 jaren tussenin wel kunnen overleven.
Praktijk en theorie staan vaak tegenover elkaar. Wij, libertariërs, zitten dan meestal vast tussen ons diepgeworteld geloof in “het beste” en de noden in de realiteit.
Betreffende de onafhankelijkheid van de ECB: blijkt dat het nieuwe project-verdrag die wil inperken!
"In that paper's account, Trichet had raised concerns about the effect of Article 9 (although the Article was not named), arguing that the absorption of the ECB into the institutional structure would undermine the Bank's independence underwritten in the current treaties (Article 108)."
http://eureferendum.blogspot.com/2007/08/ploughing-lonely-furrow.html
Een reactie op bert:
"De ECB vermindert op deze wijze immers de enorme impact van deze crisis. Natuurlijk is dit enkel maar nuttig op de korte termijn, maar als de banken één voor één de boeken sluiten omdat ze financieel aan de grond zitten, is er van een lange termijn zelfs helemaal geen sprake meer. Vandaag is er nood aan een snelle oplossing. Morgen zullen we wel zien of er neveneffecten zijn, en overmorgen zullen we de veroorzaakte problemen wel opnieuw het hoofd bieden."
--einde--
Dit is nu net wat me stoort aan de korte-termijn politiek. Bekeken vanuit het standpunt van de ECB, EU, kortweg "de overheden" heb je gelijk, voor hun is er geen "long run", volgend jaar zijn het verkiezingen en nu zijn er lobbygroepen die vanalles vragen.
Echter, voor de mensen is er wel zoiets als een 'long run'. Mensen werken, maken toekomstplannen en moeten dan vaststellen dat het spaargeld niets waard is. Het grootste probleem komt bij de interne werking van de markt zelf. Bedrijven maken foute inschattingen, investeren op momenten dat de vraag in feite gedaald is (maar wordt hooggehouden door vers geld) en dan later blijkt dat er geen vraag meer was. Dat dus met andere woorden hun investering overbodig waren, of erger nog, gewoonweg fout (ze hadden het beter ergens anders geïnvesteerd). Om crue te zijn, zo is te de crash van '29 ontstaan. Niet toevallig in '13 is de FED ontstaan en 10 jaar later op volle geld-productie overgeschakeld. (en op korte termijn bekeken hadden ze gelijk, door geld van papier te maken was het plots meer waard, en jah 'long turn', wie keek daar nu naar...?)
Toch zijn er mensen die vinden dat ceteris paribus al deze neveneffecten het toch beter is de markt-werking even uit te stellen. Dan vraag ik me af hoe ze dit rechtvaardigen?
Overigens, waarom mogen inefficiënte banken niet failliet gaan en inefficiënte beenhouwers wel? Het prachtige van de vrije markt is net dat rotte appels verdwijnen, geld bijdrukken om deze levend te houden is dan ook het laatste dat wenselijk is.
Het lijkt me nuttig af te sluiten met deze quote van Ronal Reagon:
"Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidise it."
Het was inderdaad toch wel even schrikken, die afbetalingsproblemen bij hypotheekhouders in de Verenigde Staten. Natuurlijk betreft het in feite een deel van de markt dat eigenlijk geen hypotheken had mogen hebben, maar het is wel gebeurd. De bange gevoelens zijn blijkens de aandelenkoersen alweer naar de achtergrond verdwenen, en terecht.
Heeft de markt gefaald? Ik denk van niet. De markt kan inderdaad niet falen, net zoals Dhr. Deroeck beweert. De markt zou zichzelf automatisch ook hersteld hebben, maar dan had het misschien iets langer geduurd.
Dhr. Deroeck's kritiek op de ECB is dan weer wel een brug te ver. Natuurlijk zijn er betere manieren om met zulke problemen om te gaan dan alle eieren in de staatskorf te gaan leggen, maar men moet nu éénmaal roeien met de riemen die men heeft. Zolang de ECB bestaat, kan men deze best gebruiken voor wat ze dient, nl. voor de échte schommelingen op de markten min of meer te nivelleren zodat er nooit extreme crisissen kunnen ontstaan. Daarin slaagt de ECB over het algemeen wel. Laat ons de ECB dan ook in dit debat met rust laten. Ze zijn het probleem NIET, maar louter een deel van de oplossing.
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