The "free markets" wouldn't mind seeing everybody in Zimbabwe just die so that they could pick up some very nice property very cheaply.
Free markets "wouldn't mind" anything. Markets as such don't have desires or things they wish not to happen. They are not conscious entities.
The players in the free market are people, most of whom would not want everyone in Zimbabwe to die, maybe Mugabe, perhaps a few of his cronies, but not the whole country.
Zimbabwe used to create more wealth per person than most African countries. Markets don't really have desires, but if any could be reasonably imagined for them it would be to get rid of Mugabe's interference and wealth destruction.
You talk about the bailouts deflating our Dollar
Technically inflating. But since the dollar will be worth less, I guess I can see how it could be described as deflating, which on the surface seems to connect to the idea of getting smaller, as in the dollar's value getting smaller.
but how much do you think our Dollar would be worth if we had just let our entire banking system default?
First of all the entire banking system wasn't going to default. There are a lot of healthy banks, in fact we have had larger numbers of unhealthy banks at other points in the last few decades. (Which doesn't mean the problem isn't worse now, its not just a matter of counting healthy and unhealthy banks, but some perspective is useful, we were not facing a total collapse of the banking system).
Without the intervention, in the short run the dollar probably would have gone down against other currencies. But in the long run the inflationary impact of tossing around all that money will likely either 1 - Make the dollar go down more, both in terms of how much it will buy, and in terms of how much foreign currency you can get for it (unless other countries toss around money the same way, which would negate the latter), or 2 - Require a lot of tightening to avoid the inflation which will lead to another recession later, or 3 - Both. We get the inflation, then even with inflation we get slow or negative economic growth (stagflation), then we need really tight money to stop the inflation and we get a severe recession. (Think of the 70s followed by the early 80s recession).
And its not like we will avoid a recession by all this intervention now. We will still have one, by some measures we are already technically in one, by others recessions can't be called until awhile after they start, but when the next quarterly report comes out, we will be seen as being in a recession now.
We might not even be reducing the impact of the recession with all the intervention, as the intervention introduces a lot of uncertainty and prolongs or in some cases prevents the changes we need to make to get healthy growth in the future. |
