Sep 21, 2008
There's No Free Lunch and No Free Economy
Christopher Caldwell, who writes a weekly column for the Financial Times, has a characteristically insightful article this weekend. He is no libertarian but I think he understands the significance of what is going on better than most commentators.
"President George W. Bush, Fed chairman Ben Bernanke and treasury secretary Hank Paulson all declare their preference for free-market solutions and a desire to minimise moral hazard. But they sound like François Mitterrand in mid-1983 when he abandoned his socialist 'programme commun' in the face of capital flight and a collapsing franc, all the while proclaiming his devotion to socialism."
"By the time the situation calms and memories fade, there is unlikely to be enough capital in the economy to fund a restoration. Right now, the oldest baby boomers are 63. The ratio of earners to dependents has been at an all-time high. A vast earner generation is about to begin its transformation into a dependent generation. Probably a more dependent one than anticipated."
"President George W. Bush, Fed chairman Ben Bernanke and treasury secretary Hank Paulson all declare their preference for free-market solutions and a desire to minimise moral hazard. But they sound like François Mitterrand in mid-1983 when he abandoned his socialist 'programme commun' in the face of capital flight and a collapsing franc, all the while proclaiming his devotion to socialism."
"By the time the situation calms and memories fade, there is unlikely to be enough capital in the economy to fund a restoration. Right now, the oldest baby boomers are 63. The ratio of earners to dependents has been at an all-time high. A vast earner generation is about to begin its transformation into a dependent generation. Probably a more dependent one than anticipated."