In its original meaning, "crisis" signifies a turning point that can either lead to improvement and recovery or to more severe deterioration. In the case of Argentina, with the future of the Argentinean people in mind, one must hope for the abandonment of its interventionist economic system, with its reliance on a bureaucratic apparatus and its self-chosen dependency on foreign credits.
Debt is great on the way up. You buy a house or buy stocks and they rise and your debt stays the same, accruing as it does some interest rate that is well below the rate of your advancing stocks and appreciating home. But when prices fall, debt becomes a very cruel master.
The introduction of the euro consists simply of introducing another "managed" paper currency. Whether it will go up or down against other currencies will continue to depend on how it and the other ones are managed.
We will never resort to a bailout, said the Bush administration concerning the financial failures of the Argentinian government. That was one week before the same administration arranged an $8 billion line of credit for the same government.
Some are claiming that the attacks of September 11 triggered this latest economic slide, but all signs indicate that the U.S. economy already was in recession even before the attacks.
It would be the supreme irony if, in Greenspan's eager rush to bail out his constituents at the first whiff of every trouble from Y2k to WTC, all he and his myrmidons on the lower slopes of Olympus have accomplished is to topple the very banks they are there to protect.
One of many pastimes of government bureaucrats is forcing foreign banks to cough up tax information on US citizens. This is a disaster for the cause of privacy, the right of contract, and freedom itself. If the campaign, which has been going on for years, finally succeeds, it will mean the end of bank privacy for Americans. It will also devastate foreign economies that see a comparative advantage in offering secure banking to people from around the world.
Charity funded through voluntary contributions is vastly superior to the welfare state. It should stay off the dole.
Does the Fed play politics? As Gregory Bresiger recalls, it's been a part of the game for a very long time.
One thing that has achieved Holy Writ with economists and politicians is the Consumer Price Index, or the CPI. Each month, people from Alan Greenspan to traders at the New York Stock Exchange to the economist in the Economics 101 prison await the latest announcement from the US Department of Labor that tells us the change in "consumer prices" from the previous month.
