Tuesday, November 03, 2009

Captured from Inception

George Sorros is correct in his observation that many things in the current economic paradigm are broken. What he fails to appreciate is that the things that are broken were the things designed by left leaning intellectual snits such as himself.

The prime example of a broken system is the NASDAQ as designed by the progressive thinking Bernard Madoff. The system was designed with short selling and options in mind and configured such that hedgefunds working in concert with brokers could undertake massive stock manipulations that allow the designers of the system to take over firms, or to simply profit from the destruction of firms foolish enough to list on the NASDAQ.

The credit default swaps that came into existence in the last days of the Clinton administration was similarly designed by people convinced they found a short cut to progress. Fannie Mae, Freddie Mac, the FLSIC system, etc, were all designed by progressives.

The center piece of the both the current health care and cap and trade legislation are highly partisan markets created and run by progressive drones implementing the philosophy of Sorros and his predecessors.

I was just watching a YouTube video by a Garrett Gundersun (that I placed on Salt Lake Sites). He was talking about the foolishness of our technocratic dream where we place our faith with investing technocrats, when our financial decisions should be driven by a pursuit of "personal abundance."

I don't know if Mr. Gunderson is someone worth following. Few gurus are. I've watched so many people wipe out incredible amounts of wealth based on really bizarre understandings of the market, that I've been at a loss.

Only a few people really stand out today. Pat Byrne of Overstock is on a roll with Deep Capture. However, "capture" may not be the right term. "Capture" implies that something was good at inception, but was later corrupted by evil doers.

So many of the markets that exploded in our face (the Federal Reserve, government backed re-insurance, the insurance industry itself) were captured at inception. The markets were designed as short cuts to progress, and the short cuts to progress have systematically undermined people in the real world ever since.

Ridding ourselves of the systemic faults that caused the 2008 economic dip will require more than wrapping our markets with highly partisan regulators. It will involve actual thinking about the very foundation of economics and the nature of wealth. An activity which has not been well addressed since Adam Smith's work on the Wealth of Nations.

The worst approach we can take is to continue along the lines of taking counsel from Sorros and the market manipulators whose efforts magnified the depth of the economic downturn.


Scott Hinrichs said...

Ah, but we humans have a long and rich history of turning to the hand that smites us for help. Human nature, and all.

y-intercept said...

On a rare occasion people realize that the false saviors they elevate to power are precisely the people they need saving from.

When people realize this, they are able to advance society.

For example, the Founders of the US realized that the big government of King George was the oppressor, they created a limited government and set up the United States for centuries of success.