This image was posted by a reader in a previous post and I think it is just an excellent illustration of the beauty of the market.
What I think the reader was trying to communicate however was how awful the market and the market mechanism is. See, look! Those greedy merchants (ha!) are jacking up the prices of goods just to make a buck. How terrible!
I say what we see above is in fact fantastic and a great example of why the market mechanism is about as close to a miracle as there is in this flawed world.
Some folks won’t like this cartoon largely because it hits a little too close to home. Not because it’s wrong.
Look, most of us who understand the moral and functional superiority of free enterprise flirted at some point in our lives with socialism. We get the appeal. Thing is socialism is not a system that anyone should commit long term to. Socialism, even in Scandinavia, will always disappoint. It’s doomed from the start. It’s fundamentally unsustainable.
Sometimes reality shines through even in Cuba.
The Soviets sure did love infrastructure. Worked out well for them.
These are opposites, not similars.
Federal Reserve “independence” is a convenient untruth for the Fed and for many in the Washington political class. The Fed is absolutely influenced by politics. This is evident even to the fairly casual observer.
(From The Dallas News)
Carnegie Mellon University’s Allan Meltzer, a distinguished monetary economist, had this to say about Fed policy during the crisis: “Under Mr. Bernanke, the Fed has sacrificed its independence and become the monetary arm of the Treasury.”…
…Bernanke’s Fed seemed to care just as much about the health of prestigious financial houses as the state of the economy.
Another great report out of Caracas. I have to say that these guys have got to be at least a little nuts. Though we are thankful for the light they are shining on the situation in Venezuela.
Funny how socialism makes one appreciate the finer things in life, like simple price discovery.
During the Crash the Fed should have let things fall. It would have been painful. Very painful for some. But the market would have cleared. Some people would have picked up deals and many people would be in houses now, even many who would have hurt in 2008/2009, with positive equity.
Instead the Fed intervened and tried to put a bottom under house prices. As such we have the situation we have now. Millions of homeowners still underwater and a much less mobile workforce.
This is pretty great. Apparently it’s a hit. Who ever thought a game about standing in line to get old potatoes would be well received?
Perhaps some people know how important it is to never forget.
Venezuela is seeing some challenges. But this is what happens when planners try to deny the natural tendency of prices to ebb and flow.