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The Knee-Jerk Government Reaction


The super state of the European Union is reacting to information potentially undermining their political agenda in the expected way: prohibition, repression, and censorship. The latest move to “save” the economy is not to get the finances under order, as any individual or market organization would have (been forced) to. No, to government the solution is to sweep the problems under the carpet – to pretend they aren’t there. And, of course, to shoot the messenger. Long before he arrives with the bad news.

This is what the European Commission is now doing. While President Obama badmouthed the rating agencies, at least he did not (as far as we know) outlaw rating. But this is exactly where the European Commission is heading: the best way of stopping a market reaction to bad finances is not to avoid bad finances – it is to hide information of the fact. In other words, they propose a “blackout” of credit ratings of troubled European states. It is the typical knee-jerk reaction only governments (believe they) can get away with.


Contact Per Bylund

Per Bylund, PhD, is a Senior Fellow of the Mises Institute and Associate Professor of Entrepreneurship and Johnny D. Pope Chair in the School of Entrepreneurship in the Spears School of Business at Oklahoma State University, and an Associate Fellow of the Ratio Institute in Stockholm. He has previously held faculty positions at Baylor University and the University of Missouri. Dr. Bylund has published research in top journals in both entrepreneurship and management as well as in both the Quarterly Journal of Austrian Economics and the Review of Austrian Economics. He is the author of three full-length books: How to Think about the Economy: A Primer, The Seen, the Unseen, and the Unrealized: How Regulations Affect our Everyday Lives, and The Problem of Production: A New Theory of the Firm. He has edited The Modern Guide to Austrian Economics and The Next Generation of Austrian Economics: Essays In Honor of Joseph T. Salerno. He has founded four business startups and writes a column for Entrepreneur magazine. For more information see PerBylund.com.