Thursday, September 18, 2008

Here's FEE's In Brief for today:

The Freeman: The Recurring Crisis


Recently the governor of the Bank of England announced that the nice times had come to an end. (In the Bank's lexicon, NICE = Non-Inflationary Constant Expansion). This news will not come as any shock to the many Americans who have had their homes repossessed recently, but it does appear to have startled many of the scribblers who make their living from the financial pages on my side of the Pond. One of the two most striking features of the current financial contretemps is the way it has seemingly come as a complete surprise to most financial commentators and economists. (The other is the way that financiers and bankers who have spent the last few years presenting themselves as buccaneering entrepreneurs have suddenly discovered a fondness for taxpayer bailouts.) As recently as a year ago, most commentators in the financial press were convinced there was no real prospect of a major correction to the real-estate market, much less a serious financial crisis. There were dissenting Jeremiahs who warned that things could not go on as they had been, but they were in the minority. (They included the most successful investor in America, Warren Buffett.) With no sense of satisfaction I report that I was, in my own small way, one of the Jeremiahs. I did not foresee all that has happened -- neither did anybody else -- but the broad outline was clear. Why did the majority miss it? The answer is a combination of common sense and a historical perspective informed by a certain approach to economics. More . . .

A NEW article by Stephen Davies

Central Banks Pump Money into Markets


"The Federal Reserve, the European Central Bank and other central banks massively escalated the assistance offered to global money markets on Thursday, coordinating efforts to ease funding constraints stemming from the financial turmoil emanating from Wall Street." (New York Times, Thursday)

If one inept central bank can't handle things, the obvious answer is a consortium of inept central banks.

FEE Timely Classic
"Banking Before the Federal Reserve: The U.S. and Canada Compared" by Donald R. Wells

GM Wants Government Loans for High-Tech Cars


"General Motors chief executive Rick Wagoner yesterday offered no guarantee that the auto giant would use American-made batteries in its new electric-powered car, the Chevrolet Volt, even as Detroit automakers pressed for $25 billion in U.S. government loans to support the development of advanced-technology vehicles in this country." (Washington Post, Thursday)

If you think business favors free markets, read some history.

FEE Timely Classic
"Atlas Shrugged and the Corporate State" by Sheldon Richman

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