Thursday, October 16, 2008

The financial crisis: nothing new

As I said earlier, I was reading Peter Ackroyd's new biography of Poe (highly recommended, solidly written and short and seems to contain everything one needs to know about Poe, if one's not a scholar) and I noticed that there were at least two grave financial crises during Poe's lifetime - which was short, only 40 years, as all the readers surely know. And the both crises seemed to fasten Poe's demise.

Now there's another financial crisis on. As I was reading Ackroyd's book, I said to Elina that why everyone still thinks capitalism is a good way to handle economy when it seems that the tendency to break down and go into a crisis is inherently built into it. I don't think there were any financial crises during the era 1930-1980 when the economy was regulated heavily throughout the world, starting from the Roosevelt era United States. (And the financial growth was steadier and even faster than it was before the current crisis.) These post-1980 crises started when the regulation ceased - and that was a deliberate decision from the politicians, not just some freak coincidence or a sign of the market's own will. After 1989 there have been at least three global financial crises - in twenty years! And still people think that capitalism is a good system! (Of course the era 1930-1980 contained a world war, the Cold War, lots of international conflicts throughout the world etc., lots of political suppression, but in the Western world, or in the free countries, if you will, and especially in the Nordic countries, many things were better than they are now.)

PS. Hmm.. did I mention the Poe biography only in a comment on Patti Abbott's blog?


pattinase (abbott) said...

I'm with you: regulate the hell our of it. Slow growth beats misery.

Anders E said...

Could someone tell me why the the Swedish currency is sinking like a stone at the moment? I mean, we have a budget surplus and a trade surplus (always had), a rapidly shrinking national debt and very solid banking (we learned our lesson around 1992-3) and yet the USD and the Euro are both skyrocketing at the moment.
Yeah, I know - in these times of turmoil, investors tend to stick to the big currencies. But wait - aren't these "investors" the same kind of bozos that put us in the mess we're in at the moment?

I voted for the communists in 1985 (yep, bona fide communists, pre-perestroika). I still don't regret it one bit.

Juri said...

Sorry, Anders - even though I wrote on economics, I really do know too little on it to comment on your question. But what I know is that I've voted for communists, too. One or two times. Mostly I've voted the non-radical Left and occasionally the Green Party. (Which in Finland isn't considered Leftist, as in other parts of Europe.)

Anders E said...

Ah, my question was essentially rhetorical.

I would certainly not label myself a communist. It's just that some election years I feel our dear social democrats need a good hard kick in the arse. The Greens? Hmm... The Swedish Greens are perhaps a bit too anti-union.

Btw, this year's Nobel prize winner in Economics, Paul Krugman, has a blog. I like it. The guy even has a sense of humour.