Don't Fight the Markets

Having done a little more thinking on my previous post I've come to the conclusion that we are being fed total economic nonsense.  Pretty much everything spouted from the mouths of politicians in this country, continent & even across the pond, is complete bullshit.  They blame reckless speculators, tell us that stimulus is the cure and then force the few remaining savers to part with their capital in an inane attempt to revitalise the economy.  It's lies, all of it.

It is so hard to trawl through all the smokescreens, there are so many lies to debunk that I could type for a week straight, but the main point I would like to raise is 'why are the politicians fighting the markets'?

Re-visiting the bank lending issue I wrote about before got me thinking; the government honestly believes that they know better than the lenders!  The banks refusing to lend is telling us that they don't think the climate is right for their investments to see a decent return.  On the other hand the government believes that this credit is the shot in the arm the economy so desperately needs, but if this lending was to ensure a decent recovery wouldn't the banks be leaping at the opportunity to lend and secure a decent return?

What we have here is two opposing interests; the capital owners wanting to ensure they don't flush their wealth down the toilet & the government who want to be seen doing something to improve the economy for all us common-schmucks.  So who should be believe; the greedy, self-interested lenders or the greed, self-interested politicians?

Well at least we benefit from the lenders, but gain nothing from political "good will".  I guess my point is that if the lenders don't have enough faith in the economy to lend then perhaps the government should be looking for solutions to this problem rather than simply forcing them to loan out the money into the very economy they are hesitant about.  The fears banks and other lenders have are legitimate concerns about the prospects of their potential investments & therefore the economy, which don't go away simply by forcing them to lend the money out.

The same applies for "evil speculators" who were blamed for "messing up the markets" when the government was banking on them acting in a certain way to keep the economy moving along.  But speculators are investors (just like the banks the government seems so reliant on now) and again are concerned with the return on their risk, they are not blinding speculating but reacting to legitimate concerns about the economy.

We would all be better off if politician's stop trying to blame and fight the capital owning portion of the economy and instead went with the markets, listened to concerns & made improvements which encourage legitimate lending rather than forcing it.