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Politics : Ask Michael Burke

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To: BGR who wrote (72013)	12/17/1999 10:42:00 AM
From: Mike M2	Read Replies (1) of 132070

BGR, the Austrians said communism would fail because their was no price mechanism to impose tough love. instead the state propped up failed enterprises - malinvestment and maladjustments in austrian speak. Why should centrally planned interest rates be so effective. The real estate bust is a good example of what happens when excess credit is created. If the market were allowed to raise rates to restrict credit flows to real estate developers then we might not have experienced the over building that we did. The strength of capitalism comes from the markets tough love you are free to flourish or fail. When the state props up failed enterprises or favors an industry we sacrifice efficiency. Look at Korean and DRAM. Look at all the overinvestment in industrial plant and equipment in SEA leading to TL & EV. You are a difficult student but you will learn about TL & EV one way or another -g- ho ho ho mike

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