Comments on: Economic and historical ignorance http://www.cuca.org.uk/2009/02/28/economic-and-historical-ignorance/ The largest, most active political society in Cambridge Mon, 31 May 2010 11:13:34 +0000 hourly 1 http://wordpress.org/?v=3.0 By: Callum Wood http://www.cuca.org.uk/2009/02/28/economic-and-historical-ignorance/comment-page-1/#comment-1716 Callum Wood Mon, 24 Aug 2009 20:56:33 +0000 http://www.cuca.org.uk/?p=1109#comment-1716 Nobody gets away with insulting James Arthur Sharpe, not on my watch! Nobody gets away with insulting James Arthur Sharpe, not on my watch!

]]> By: Hugo Hadlow http://www.cuca.org.uk/2009/02/28/economic-and-historical-ignorance/comment-page-1/#comment-1704 Hugo Hadlow Sun, 23 Aug 2009 21:33:27 +0000 http://www.cuca.org.uk/?p=1109#comment-1704 http://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2009/08/yes-the-market-is-efficient.html "The implicit codicil in the claim 'markets are inefficient' is 'and someone knows better than the market.' In the real world, though, that someone doesn’t exist - or at least, is very hard to identify in advance. The notion that an expert can do better than the market is, at best, highly improbable." http://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2009/08/yes-the-market-is-efficient.html
“The implicit codicil in the claim ‘markets are inefficient’ is ‘and someone knows better than the market.’
In the real world, though, that someone doesn’t exist – or at least, is very hard to identify in advance. The notion that an expert can do better than the market is, at best, highly improbable.”

]]> By: Hugo Hadlow http://www.cuca.org.uk/2009/02/28/economic-and-historical-ignorance/comment-page-1/#comment-1631 Hugo Hadlow Sat, 11 Jul 2009 09:31:24 +0000 http://www.cuca.org.uk/?p=1109#comment-1631 I should also add, 1. Recessions are a necessary corrective measure when resources are overallocated to certain sectors of the economy. The recession occurs during the period of readjustment. "By the end of 2005, it should have been apparent that the U.S. economy was fundamentally misaligned. We had significantly overinvested in housing and significantly underinvested in factories, plants, and equipment. In effect, we needed a recession: a period to readjust the balance between the different types of capital. More broadly, failure is an essential aspect of free markets. Failure shows capitalism is working, because it means resources are moving from bad uses to good uses." http://www.realclearpolitics.com/articles/2009/07/10/the_case_for_doing_nothing_97382.html 2. Bankruptcies do not destroy assets. When a company goes bankrupt, its assets and knowledge are sold to the highest bidder. Existing bankruptcy law is the sensible way to eliminate toxic debt, rather than the bailouts which have kept it around and thus prolonged the crisis. I should also add,

1. Recessions are a necessary corrective measure when resources are overallocated to certain sectors of the economy. The recession occurs during the period of readjustment.

“By the end of 2005, it should have been apparent that the U.S. economy was fundamentally misaligned. We had significantly overinvested in housing and significantly underinvested in factories, plants, and equipment. In effect, we needed a recession: a period to readjust the balance between the different types of capital.

More broadly, failure is an essential aspect of free markets. Failure shows capitalism is working, because it means resources are moving from bad uses to good uses.”
http://www.realclearpolitics.com/articles/2009/07/10/the_case_for_doing_nothing_97382.html

2. Bankruptcies do not destroy assets. When a company goes bankrupt, its assets and knowledge are sold to the highest bidder. Existing bankruptcy law is the sensible way to eliminate toxic debt, rather than the bailouts which have kept it around and thus prolonged the crisis.

]]> By: The British state should default on its debt « Cambridge University Conservative Association http://www.cuca.org.uk/2009/02/28/economic-and-historical-ignorance/comment-page-1/#comment-1337 The British state should default on its debt « Cambridge University Conservative Association Fri, 01 May 2009 12:45:35 +0000 http://www.cuca.org.uk/?p=1109#comment-1337 [...] they claim, most not even conceivably “stimulating”, yet supported by Legion “useful [...] [...] they claim, most not even conceivably “stimulating”, yet supported by Legion “useful [...]

]]> By: Hugo Hadlow http://www.cuca.org.uk/2009/02/28/economic-and-historical-ignorance/comment-page-1/#comment-681 Hugo Hadlow Sun, 22 Mar 2009 11:51:11 +0000 http://www.cuca.org.uk/?p=1109#comment-681 Let me add: George accuses us of "dumb faith in the efficient market hypothesis" On the contrary, of course, us liberals do not believe markets are perfect. Free markets are just individual men and women undertaking voluntary exchange. (And we haven't even had one of those.) In fact, central to the liberal critique of government intervention in the economy is the belief that markets are <em>not</em> perfect - that they do not clear instantly. The whole problem of government-set interest rates is that they ignore <em>time preferences</em>. And recessions take <em>time</em> to fix themselves. Let me add:

George accuses us of “dumb faith in the efficient market hypothesis”

On the contrary, of course, us liberals do not believe markets are perfect. Free markets are just individual men and women undertaking voluntary exchange. (And we haven’t even had one of those.)

In fact, central to the liberal critique of government intervention in the economy is the belief that markets are not perfect – that they do not clear instantly. The whole problem of government-set interest rates is that they ignore time preferences. And recessions take time to fix themselves.

]]> By: Christopher Stanton http://www.cuca.org.uk/2009/02/28/economic-and-historical-ignorance/comment-page-1/#comment-502 Christopher Stanton Sat, 28 Feb 2009 23:49:10 +0000 http://www.cuca.org.uk/?p=1109#comment-502 Not only does the Varsity article display a lack of awareness of economics, but, as a history student, I can say that he should spend some more time with reading about the Bretton Woods system. When governments try to run their economies as sub-departments of their finance ministries, the results are rarely positive, and that was what happened in Britain. Unsurprisingly, government after government opted to endure inflation rather than run the political risk of higher unemployment, by pumping more cash into the economy. This culminated in the mess that was the 1970s (although the warning signs were obvious from the mid 1960s) and Dennis Healey taking a begging bowl to the IMF. The man in Whitehall or Washington does not automatically know best. Not only does the Varsity article display a lack of awareness of economics, but, as a history student, I can say that he should spend some more time with reading about the Bretton Woods system. When governments try to run their economies as sub-departments of their finance ministries, the results are rarely positive, and that was what happened in Britain. Unsurprisingly, government after government opted to endure inflation rather than run the political risk of higher unemployment, by pumping more cash into the economy. This culminated in the mess that was the 1970s (although the warning signs were obvious from the mid 1960s) and Dennis Healey taking a begging bowl to the IMF. The man in Whitehall or Washington does not automatically know best.

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